Any actual feedback or review about the Nokia E90? It's selling at P 46k plus. Is it worth the wait?

AnthonyServinio

07-17-2007, 11:35 PM

Any actual feedback or review about the Nokia E90? It's selling at P 46k plus. Is it worth the wait?

I was only able to look at a dummy model but based on that and the accompanying leaflet, the Nokia E90 is a big improvement on the Nokia 9500 (my current phone) but the price is too prohibitive so I'll just wait until the price goes down to a manageable level or buy a second hand unit like when I bought my N9500 phone a year ago, the price was down to PHP11,000.00.

These days, I would rather buy a decent laptop with the amount for a brand new E90.

atenean_blooded

07-17-2007, 11:49 PM

Why even bother with Nokia, when the iPhone is coming soon?

gameface_one

07-18-2007, 12:02 AM

^^^Depends on the user profile Blooded. The E 90 is said to be the ultimate cellphone business tool. It has a 3.2 MP camera with video cam capabilities plus FM Radio, Symbian Pocket PC software with Office capabilites, Wifi, Media and Music Player, etc. You can also text while you drive by using the phone face key board instead of the Qwerty one.

JonarSabilano

07-18-2007, 04:46 PM

Why even bother with Nokia, when the iPhone is coming soon?

The iPhone doesn't have 3G capability. It's best described as a 2.75G.

WampumTribe

07-18-2007, 06:17 PM

Steve Jobs is God! Bill Gates is the Devil! (wala lang.)

iMac, iTunes, iPod, iLife, iLove Macs, iLove Apple

gameface_one

09-21-2007, 10:31 AM

Anyone knows if there's a software that can enable the E90 to become DVB-H (mobile TV) capable?

atenean_blooded

09-27-2007, 11:23 AM

Why even bother with Nokia, when the iPhone is coming soon?

The iPhone doesn't have 3G capability. It's best described as a 2.75G.

3G iPhones might be in production by next year. In any which case, I've seen an iPhone in action, and it's lovely.

Is the Nokia 6301 okay? Dami kasi meron sa DLSU nun and I want to find out what's the feature that they like in the phone.

amdg_baby

10-05-2007, 07:25 PM

Wanna Mac tonight?
I'm thinking of buying a new laptop and can't decide if I want to go Mac. Budget: $2500 and not a penny more.
Everyone I've talked to who has used a Mac seems to have been converted. What's so great about it? Would you go Mac?

flsfnoeraekadad

10-06-2007, 08:34 PM

Yes. Windows is freaking hopeless even with Vista. The only reason why I can't go Mac is because all of my mom, dad and my brothers only know how to use Windows. ::)

Mac is better than Windows in terms of usage and in terms of protection.

WampumTribe

10-06-2007, 09:27 PM

Wanna Mac tonight?
I'm thinking of buying a new laptop and can't decide if I want to go Mac. Budget: $2500 and not a penny more.
Everyone I've talked to who has used a Mac seems to have been converted. What's so great about it? Would you go Mac?

The two things generally going against Macs are its (a) price and (b) lack of software. While Apple computers will always be pricier (super-duper quality does come at a cost), the solitary-island-in-a-sea-of-Windows problem has been addressed by Apple's Boot Camp, which allows you to install Windows in your Mac.

Haven't really used a PC since 1996, so i can only tell you why iLove Macs:
1. Fast and Powerful – that's why almost all ad agencies and design shops use Apple for graphic-intensive work.

2. Idiot-friendly – If you know hot to point-and-click, you'll know how to use a Mac.

3. Immunity – Not affected by PC viruses.

4. Uber-COOOOOOOOOOOOOOOOOOL – consistent Red Dot awardee for design. Macs drop more jaws than all PCs combined (i just made that up but i think it's true).

5. Mac Community – People like their PCs. MacAddicts love their Apples. Getting online help is easy.

6. Steve Jobs – The guy's a cultural icon while Bill Gates is the poster child for Corporate America. Steve is Obi-Wan to Bill's Darth Vader. Gates has pies and antitrust cases thrown in his face while Jobs has virgins offering themselves to him at the altar of hipness. Okay, the virgins are unsubstantiated, but not the pies and lawsuits.

7. And so on

8. And so forth

For more naturally biased views on "Why get a Mac?," watch their ads:
http://www.apple.com/getamac/

WampumTribe

10-06-2007, 09:39 PM

Yes. Windows is freaking hopeless even with Vista. The only reason why I can't go Mac is because all of my mom, dad and my brothers only know how to use Windows. ::)

Mac is better than Windows in terms of usage and in terms of protection.

Macs do Windows, too. With Boot Camp, your family will have their familiar Windows before biting the Apple on the Tree of Knowledge and subsequently discovering the naked truth, free will and true plug 'n play, click 'n drag ease.

amdg_baby

10-07-2007, 10:33 PM

thanks for the link. i'm about 95% sure i'll get a mac. next question is should I wait for the new OS or will I be fine with bootcamp? i have some office software that will only run on windows and from what I gather, bootcamp will address that. what happens when the license on that expires? will i have to buy the new os? (i think they call it leopard)

WampumTribe

10-08-2007, 08:52 PM

The Mac OS X Leopard (http://www.apple.com/macosx/leopard/) will supposedly ship on October 26. There's no definite news whether Macs with pre-installed Leopard will be available soon after. Some say it could take a couple of months; others claim Apple usually rolls out units with a new OS simultaneously.

If time isn't a consideration, wait for the Leopard-driven Macs. It features 300+ innovations over its predecessor. All those extra features won't necessarily break your not-a-penny-over-$2500-rule. The low-end aluminum MacBook Pro retails for $1,999. Despite its "lesser" specs, it's still a creative workhorse. The student-targeted, polycarbonate-encased MacBook on the other hand sells for $1,499 tops (without customization).

But if you need one soon, at least wait for the Leopard's release before buying a laptop (go with the MacBook Pro). Stores will usually throw in a sweet deal: a discount on the new operating system plus free installation.

amdg_baby

10-08-2007, 11:03 PM

Thanks, WampumTribe! That's the best advice i've had off and on the internet.

5. Weekend Task too such as Pigfighting where you can get many exp from pig monsters and a Maze

SO Lets Play this game together!! Im so sure that you wont get bored with this game!!!

Here is the site:

http://zodiac.enjoymmo.com/index.php

See yah there Playah!!!

chez_moi

07-29-2010, 11:50 AM

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Pierre Omidyar?s fund invested in Rappler. Is he trying to destabilize the PH? Uhm, no.

A blogger posed this question, and posited that the reason anyone would is to achieve devious ends, in this case, to destabilize the government.

The blogger had three problems about Rappler?s financial affairs: its disclosures in its GIS and financial statements, its issuance of Philippine Depository Receipts to foreign investors, and the reasons why these investors would invest in a media company that was losing money.

Oscar Tan adequately addressed the first two in his Inquirer column. I want to talk about the third. According to the blogger, it was obviously irrational for savvy foreign investors to invest in Rappler if it generated a cumulative loss of PHP 163 million from 2011 to 2015.

Thus, there must be some other non-economic reason why these investors keep infusing their capital ? to destabilize the government perhaps?

Believing this sends the wrong message to Filipino founders and is bad for promoting entrepreneurship. Full disclosure: some of Rappler?s founders have also invested in one of my businesses.

The blogger makes a ridiculously inappropriate comparison to a sari-sari store that is losing money. Why would the store owner keep injecting cash to fund an unprofitable operation?

And therein lies the problem. Rappler is not just a media company, it?s also a technology startup. And early stage venture capital investing in the technology industry works differently.

What makes Rappler a technology company? It?s not just because it?s online or it has an app. Rappler?s built it own infrastructure to manage and process its content, via a proprietary content management system, its mood meter, and its own data science operation.

Unfortunately, the sari-sari store analogy doesn?t capture the fundamental nature of how Rappler does business.

So why would two big foreign investors infuse capital in a money-losing technology startup?

Since people are fond of easy analogies, let me offer a more apt one.

Let?s say Ramon and Joey decide to start a company to launch a news app. They put in PHP 100,000 each of their own money. Their total capital is Php 200,000. They incorporate with 200,000 shares and a par value of Php 1 per share. So Ramon and Joey each own 100,000 shares, for a total of 200,000 shares.

They use the Php 200,000 in 6 months to fund development of their app, and by the 7th month, they enter into a deal with Alibaba?s Jack Ma. Jack likes media investments. Previously, he also acquired a stake in the South China Morning Post.

At month 6, Ramon and Joey?s company is losing money.

Jack Ma?s offer is to give Ramon and Joey?s company Php 1 million in exchange for a 20% ownership of the company.

To do this, the company issues 50,000 new shares to Jack. Why 50,000? Because 50,000 shares is the equivalent of Jack?s desired 20% ownership stake in the company.

Thus, the total number of outstanding shares in now 250,000 shares, broken down into:

Why would Ramon and Joey accept a deal wherein their ownership stake in the business is reduced from 50% to 40%? (We call this “dilution”).

Because the value of Ramon and Joey’s shares went up 20x. Twenty times.

“WTF OLIVERSEGOVIA, how did this alchemy happen???” you might say. “In just 6 months??? For a company that is losing money??? That is magic. Or deception. Or both. You are destabilizing the stock market. I will report you to SEC Chairperson Teresita Herbosa. You must also be on drugs???”

Well, I can tell you if you aren’t so angry. (I’ve actually had reactions like this when I run my Startup Valuation workshops. The concept of equity value is so abstract for most people to understand!)

This is why. Recall that Ramon and Joey started the company by incorporating with PHP 200,000 in capital, 200,000 shares and thus, a value of P1 per share.

When Jack Ma invested his Php 1 million, he is buying new shares at a price of PHP 20 per share (P1 million divided by 50,000 shares). And because all shares in the same class must have the same value at any point in time, Jack’s investment implies that Ramon and Joey’s shares are also worth PHP 20.

Note that Ramon and Joey personally did NOT receive PHP 20 for each of their shares. Jack’s money goes to the company, not to Ramon and Joey. But Ramon and Joey each increased their net worth by PHP 2,000,000, at least on paper.

Where does the value come from? In simple terms: it comes from the past, the present, and the future.

The company created an app in the past 6 months. A customer can buy the app for a certain price. Jack is implicitly saying that the app is worth PHP 4 million.

Why? By investing PHP 1 million for 20% of the company, Jack is saying that the whole company (100% of it) is worth PHP 5 million. Minus his PHP 1 million cash infusion, their app is worth the residual: PHP 4 million.

It also comes from some estimate of the future value. Because of Jack’s investment, the app can grow its user base. It can start to sell advertising, or sell premium reports in its app. If all of these revenue streams resulted in the Ramon and Joey’s company being acquired by a bigger media company (say, ABS-CBN or GMA) for PHP 100 million in 5 years time, then Jack’s stake will be worth PHP 20 million at that point. Jack grew his PHP 1 million investment by 20x in 5 years. You can’t get a deal like this investing your savings in a bank.

At its core, borrowing money or investing money is all about forecasting the future value of something and estimating what price one has to pay for that future value, at the present time. This is what enables a bank to give you an auto loan or a housing loan – because you can continue to grow your salary and thus pay down the loan, or the house can appreciate in value in the future. This is also why the state invests in public education. Because the collective output of the iskolars ng bayan will be worth a lot to the country one day.

You might be wondering, why would Jack only invest in a minority stake? Because he knows that for the company to be worth more in the future, Ramon and Joey need to feel that they are true owners in the business, and not just employees. To achieve that, Ramon and Joey must retain a majority stake. Investors call this an alignment of interests. Otherwise, why would Ramon and Joey continue to work hard when majority of the gains go to Jack?

So, back to the original question: why would two big foreign investors infuse capital in a money-losing technology startup?

Because they believe their stake in Rappler will be worth more in the future. Plain and simple.

And like ABS-CBN and GMA – media companies with foreign investors – Rappler opted to use PDRs as the financial instrument rather than common shares.

*****

The heart of the blogger’s dilemma is that most people do not understand how venture capital valuation works.

Now you might say: the analogy of Ramon and Joey assumes a venture that’s been around for only 6 months. Rappler has been losing money for 5 years!

Guess what?

It will likely continue to lose money for the next 5 years. And that’s what could actually make it a good investment.

Amazon first registered an annual profit in 2004, a full 10 years after it was founded. It continued to lose money for the next 10 years after that. It’s only today that Amazon’s started generating profits.

Why? Because Amazon continues to reinvest its operating cash-flows into new technology, platforms, products, and services. That’s brought us affordable cloud computing, Prime delivery, video streaming, the Kindle, the Amazon Echo, and more. And I don’t doubt for a second that anyone would turn down a deal to invest in Amazon circa 1995.

That’s because profit isn’t the only measure of value. In technology, it’s actually a very poor measure of value as startups need to keep re-investing its cash flows to fund the best talent and to launch new products. So rather than profits, venture capital investors also look for milestones over the long term to measure value.

For anyone in the know, digital media is also a particularly hard business to monetize. From my understanding, other media sites like Tech in Asia, e27, and Vox are also unprofitable. So Rappler isn’t doing anything out of the ordinary, investment-wise. If Maria Ressa pushed Rappler to be profitable by Year 2 – she is actually not doing her job right!

Now that is something very hard for you to fathom, if your model of entrepreneurial success has been Henry Sy, John Gokongwei, or Lucio tan.

In the 1970s, Xerox funded a lab in California, called the Palo Alto Research Center – or PARC. For many years, PARC lost huge amounts of money doing research on information systems. One early result was the Alto: an integrated desktop workstation, with a keyboard, memory, processing power, and connected to a laser printer and other workstations via an ethernet.

If that sounds familiar, that’s because it is: the Alto was the early prototype of the personal computer and the rest, as we know, is history. If Xerox purely focused on PARC’s bottom-line, you wouldn’t be reading this post in your PC, Mac, or smartphone.

Measured within this frame, the correct question is not “Why invest in Rappler when it is losing money?” but “Why can’t Rappler be investing more to build new products, acquire the best editorial talent, and expand to other countries?“

Will Rappler turn out to have as big an impact on Philippine media? We don’t know yet. That uncertainty is what makes technology investing fun.

But singly them out for issuing PDRs when it is a perfectly legal financial instrument and imputing some nefarious motive on the part of its investors without first understanding how venture capital investing works or the broader nature of technological revolutions is just hilariously foolish.

After Jack Ma mocked the internet service our telcos provide, I was hoping an overnight miracle will boost the quality of our broadband connectivity. National honor is at stake.

I am told the telcos have the existing technical capability to vastly improve the broadband service they give us, but would rather that we upgrade our plans to get that. The BPOs are paying for the privilege of getting world class internet connectivity.

Acting DICT Secretary Eliseo Rio Jr. cited lack of cell sites as one cause of the problem. We had enough cell sites for text messaging, but not when we all started using smart phones. The telcos blamed regulatory problems, notably at the local government level that prevents them from building new cell sites faster.

Telecoms experts, however, cautioned me that the problem isn't as simple as having more cell sites. Nor is it just a question of having the frequencies of San Miguel, which the two telcos acquired. Indeed, a year after they got the San Miguel frequencies, service quality hardly improved.

When we had dinner with President Duterte, one topic he was passionate about is bringing competition into the telco business. The President said he fired former DICT secretary Rudy Salalima because he was not working fast enough to improve telco competitiveness.

As soon as he left, Salalima's acting successor, retired General Rio, made public his plans to increase competition in the telco industry. The cornerstone of General Rio's plan is letting smaller players have direct access to international connectivity as they provide the middle and last mile network, independent of the two telcos.

Experts tell me we can triple the number of cell sites in the country, but we won't get the speed and cost we want for so long as the two telcos control our international access through their landing stations and exclusive use of satellites that connect us to the world.

Using satellite for internet connectivity is one obvious solution to our problem, but it can't be done under our current rules. Countries with faster internet than the Philippines, like Japan, Indonesia, Thailand, even Singapore all use satellite broadband.

The main barrier to satellite use in the Philippines is policy. EO 467 (s. 1998 ) and NTC MC 04-03-99 currently restrict the use of satellites to enfranchised telcos, based on the outdated notion that they are used for voice services, a telco expert explained to me. We need a policy that is more appropriate for the internet Age. "Opening up the market for satellite broadband is an important first step to ensuring that all Filipinos, wherever they are, will benefit from internet connectivity."

If there is one accomplishment I am confident the Duterte administration will deliver, it is improving our internet service. The President is pretty incensed about the current situation and since he has made public how piqued he is, his officials must deliver results fast? or suffer the fate of Salalima.

The good news has started to happen. Last week, BCDA and DICT announced a partnership with Facebook to build a P975 million high-speed internet infrastructure called the Luzon Bypass Infrastructure. It will have a capacity of 2 terabits per second, almost equal to the combined capacity of existing telco players.

Under the agreement, BCDA will bid out the construction of two cable landing stations placed in Baler and Poro Point, while the DICT will operate the facility. Facebook will construct and operate the submarine cable system that will land in the cable stations. This will give us direct connections from Luzon to internet hubs in the United States and Asia. The project is expected to go online in 2019.

This is good news. Having another source of bandwidth is a welcome change. Sources told me Usec. Denis Villorente has been working tirelessly on this initiative for over a year, but then Sec. Salalima did not want to pursue it. Instead, Salalima wanted government to build cell sites and save the telcos huge amounts in capex. This is probably why President Duterte accused Salalima of conflict of interest.

This development gives flesh to the plan earlier announced by General Rio to organize cable operators and regional telcos to constitute the backbone of a virtual third telco using the Luzon Bypass Infrastructure to bypass the telco duopoly. But having the bypass infrastructure is not enough. Government must be able to bring this capacity from the middle to the last mile, to our homes and offices.

Related to these developments is the announcement of General Hermogenes Esperon that government will also make use of satellites to connect to the last mile! They will amend current rules that limit access to satellites to franchised telcos.

Indeed, General Rio confirmed to me what General Esperon said. "A proposed EO has already been submitted to the Office of the President to make VSATs accessible to even just VAS license holders."

That means small players like cable TV operators, small telcos, and rural electricity coops that already have middle to last mile infra in place can connect to Google, Facebook and other international satellites without going through the telcos.

Once satellite becomes mainstream, we can imagine a proliferation of community wireless ISPs getting bandwidth from international satellites and distributing through Wi-Fi. This is how to use technology to induce real competitive behavior in our telco industry.

The announcement that President Duterte invited Chinese telcos to operate here shows he is desperate to make the telco industry more competitive. Revising the old Public Service Act to take out the telecoms industry from the definition of public utilities is needed. A proposal to this effect is now pending in Congress.

This is chapter 2 of the saga started by FVR to level the playing field in telecoms. Hopefully, it works this time. New technology can make monopolies and oligopolies things of the past.

Joescoundrel

11-27-2017, 10:39 AM

Telco shakeup

Philippine Daily Inquirer / 05:13 AM November 27, 2017

Finally, the political will to address a major national economic problem - slow internet and poor telecommunications service. President Duterte has offered China a slot to become the third major telco player in the country, a move aimed at breaking the much criticized duopoly of Globe Telecom and PLDT Inc.

The President, who reportedly made the offer during his meeting with Chinese Premier Li Keqiang in Malaca?ang two weeks ago, warned the two telcos last year to shape up or face new competition.

The Philippines' data and voice services are among the slowest and most unreliable in the Asia-Pacific region. The Philippines ranked 94th out of 121 countries for mobile internet, and 91st out of 131 countries for fixed broadband, according to the Speedtest Global Index study in September.

In both categories, the country was outranked by five of its Southeast Asian neighbors - Cambodia, Vietnam, Thailand, Malaysia and Singapore.

PLDT and Globe have also been accused of stifling competition and of failing to make necessary upgrades to improve services. They joined forces last year to buy for P70 billion the radio frequency assets, including those in the coveted 700 megahertz (MHz) band, from a potential rival, San Miguel Corp., purportedly to upgrade their services.

Much earlier competitors - Sun Cellular of the Gokongwei family and Bayantel of the Lopez family - were also acquired by the duopoly and left perhaps until their natural deaths. The 700 MHz is a low-band frequency prized for its ability to efficiently cover wide distances and penetrate buildings. Still, the duopoly's services remain lacking to date.

To show that the government is serious this time around, President Duterte has ordered that all applications from prospective new telco players be filed in the Office of the Executive Secretary, which was given 45 days to act on them.

This latest announcement ties in perfectly with the government?s signing two weeks ago of an agreement with an affiliate of Facebook to put up high-speed internet infrastructure with a capacity almost equal to that of Globe and PLDT's combined.

The project will build an "ultra high-speed information highway" that the government promised would improve the speed, affordability and accessibility of broadband internet across the country. Presidential spokesperson Harry Roque noted that this deal would have been signed as early as December last year were it not for "delays" allegedly on the part of then Secretary Rodolfo Salalima of the Department of Information and Communications Technology.

The seriousness of the government can also be seen in Congress, which is moving fast to remove telecommunications from the list of industries where foreigners are restricted to owning a maximum of 40 percent. Sen. Grace Poe, chair of the Senate committee on public services, earlier filed Senate Bill No. 1441, which sought to amend the antiquated Public Service Act to limit the definition of "public utility" to natural monopolies, which are the transmission and distribution of electricity, and waterworks and sewerage systems.

All this talk about a third telco player would not have arisen had the services of the duopoly been better. But the country had languished below the global internet speed and service availability surveys.

Even with the acquisition of the telco assets of SMC that they claimed they needed to improve their service, nothing much has changed since.

Perhaps a third major player is truly the only answer. As Senate President Aquilino Pimentel III pointed out, a third telecommunications firm is exactly what our country needs "to end a telco duopoly mired in mediocrity; a situation that has allowed them to hold the Filipino consumer hostage to poor communications and data services."

The absence of alternatives, he added, has numbed Filipinos to the reality of poor network coverage, dropped calls, disappearing loads, lost text messages, and slow data or internet speeds.

Perhaps Filipino consumers have reason to be hopeful this time around.

Joescoundrel

11-28-2017, 07:16 AM

$10,000 in sight for bitcoin as it rockets to new record high

Reuters

Posted at Nov 28 2017 01:10 AM

LONDON - Bitcoin's vertiginous ascent showed no signs of abating on Monday, with the cryptocurrency soaring to another record high just a few percent away from $10,000 after gaining more than a fifth in value over the past three days alone.

The digital currency has seen an eye-watering tenfold increase in its value since the start of the year and has more than doubled in value since the beginning of October, lifted by the prospect of crossing over into the financial mainstream, amid a flurry of crypto-hedge fund launches.

It surged as much as 4.5 percent on Monday to trade at $9,721 on the Luxembourg-based Bitstamp exchange, before easing back to around $9,600 by 1155 GMT.

Data compiled by Alistair Milne, the Monaco-based manager of the Altana Digital Currency Fund, showed U.S. bitcoin wallet provider Coinbase added 300,000 users between Wednesday and Sunday, during the U.S. Thanksgiving holiday. The total number of Coinbase users globally now stands at 13.3 million.

"The Coinbase data is evidence that adoption is not slowing down," Milne told Reuters. "Breaking $10,000 seems inevitable following the recent price action."

Bitcoin's price has been helped in recent months by the announcement that the world's biggest derivatives exchange operator CME Group would start offering bitcoin futures. The company said last week the futures would launch by the end of the year though no precise date had been set.

So far, institutional investors have largely stayed away from the market, viewing it as too volatile, too risky and too complex to invest other people's money into. But some say the launch of the CME futures could lure in more mainstream investors.

The latest price surge brought bitcoin's "market cap" - its price multiplied by the number of coins that have been released into the system - to more than $163 billion, according to industry website Coinmarketcap.

The market cap of all cryptocurrencies, meanwhile, topped $300 billion for the first time, the site said, making their estimated market value greater than that of Wal-Mart.

The staggering price increases seen in the crypto-market have led to multiple warnings from central bankers, investment bankers and other investors that it has reached bubble territory.

Some say that this could prompt regulators in the West to crack down on the market in a similar fashion to China, where bitcoin exchanges were shut down earlier this year.

"Regulators know the rewards of cryptocurrency and blockchain could be huge but (they) have more than one eye on the catastrophic ramifications if good governance, stability and control are not preserved," said David Futter, a fintech partner at law firm Ashurst, in London.

"If the carrot of self-regulation proves insufficient, the regulators will not hesitate to use their stick."

Bitcoin's biggest rival, ether - sometimes referred to as Ethereum, the name for the project behind it - has seen even more stratospheric gains this year, up more than 6000 percent. It hit an all-time high just below $500 on Monday, with its market cap nearing $50 billion.

Joescoundrel

01-15-2018, 03:20 PM

From The Atlantic ...

From The Atlantic ...

Have Smartphones Destroyed a Generation?

More comfortable online than out partying, post-Millennials are safer, physically, than adolescents have ever been. But they're on the brink of a mental-health crisis.

JEAN M. TWENGE SEPTEMBER 2017 ISSUE TECHNOLOGY

One day last summer, around noon, I called Athena, a 13-year-old who lives in Houston, Texas. She answered her phone - she's had an iPhone since she was 11 - sounding as if she'd just woken up. We chatted about her favorite songs and TV shows, and I asked her what she likes to do with her friends. "We go to the mall," she said. "Do your parents drop you off?," I asked, recalling my own middle-school days, in the 1980s, when I'd enjoy a few parent-free hours shopping with my friends. "No - I go with my family," she replied. "We'll go with my mom and brothers and walk a little behind them. I just have to tell my mom where we're going. I have to check in every hour or every 30 minutes."

Those mall trips are infrequent - about once a month. More often, Athena and her friends spend time together on their phones, unchaperoned. Unlike the teens of my generation, who might have spent an evening tying up the family landline with gossip, they talk on Snapchat, the smartphone app that allows users to send pictures and videos that quickly disappear. They make sure to keep up their Snapstreaks, which show how many days in a row they have Snapchatted with each other. Sometimes they save screenshots of particularly ridiculous pictures of friends. "It's good blackmail," Athena said. (Because she's a minor, I'm not using her real name.) She told me she'd spent most of the summer hanging out alone in her room with her phone. That's just the way her generation is, she said. "We didn't have a choice to know any life without iPads or iPhones. I think we like our phones more than we like actual people."

I’ve been researching generational differences for 25 years, starting when I was a 22-year-old doctoral student in psychology. Typically, the characteristics that come to define a generation appear gradually, and along a continuum. Beliefs and behaviors that were already rising simply continue to do so. Millennials, for instance, are a highly individualistic generation, but individualism had been increasing since the Baby Boomers turned on, tuned in, and dropped out. I had grown accustomed to line graphs of trends that looked like modest hills and valleys. Then I began studying Athena's generation.

Around 2012, I noticed abrupt shifts in teen behaviors and emotional states. The gentle slopes of the line graphs became steep mountains and sheer cliffs, and many of the distinctive characteristics of the Millennial generation began to disappear. In all my analyses of generational data - some reaching back to the 1930s - I had never seen anything like it.

At first I presumed these might be blips, but the trends persisted, across several years and a series of national surveys. The changes weren’t just in degree, but in kind. The biggest difference between the Millennials and their predecessors was in how they viewed the world; teens today differ from the Millennials not just in their views but in how they spend their time. The experiences they have every day are radically different from those of the generation that came of age just a few years before them.

What happened in 2012 to cause such dramatic shifts in behavior? It was after the Great Recession, which officially lasted from 2007 to 2009 and had a starker effect on Millennials trying to find a place in a sputtering economy. But it was exactly the moment when the proportion of Americans who owned a smartphone surpassed 50 percent.

The more I pored over yearly surveys of teen attitudes and behaviors, and the more I talked with young people like Athena, the clearer it became that theirs is a generation shaped by the smartphone and by the concomitant rise of social media. I call them iGen. Born between 1995 and 2012, members of this generation are growing up with smartphones, have an Instagram account before they start high school, and do not remember a time before the internet. The Millennials grew up with the web as well, but it wasn’t ever-present in their lives, at hand at all times, day and night. iGen's oldest members were early adolescents when the iPhone was introduced, in 2007, and high-school students when the iPad entered the scene, in 2010. A 2017 survey of more than 5,000 American teens found that three out of four owned an iPhone.

The advent of the smartphone and its cousin the tablet was followed quickly by hand-wringing about the deleterious effects of "screen time." But the impact of these devices has not been fully appreciated, and goes far beyond the usual concerns about curtailed attention spans. The arrival of the smartphone has radically changed every aspect of teenagers' lives, from the nature of their social interactions to their mental health. These changes have affected young people in every corner of the nation and in every type of household. The trends appear among teens poor and rich; of every ethnic background; in cities, suburbs, and small towns. Where there are cell towers, there are teens living their lives on their smartphone.

Joescoundrel

01-15-2018, 03:23 PM

^ Continued ...

To those of us who fondly recall a more analog adolescence, this may seem foreign and troubling. The aim of generational study, however, is not to succumb to nostalgia for the way things used to be; it's to understand how they are now. Some generational changes are positive, some are negative, and many are both. More comfortable in their bedrooms than in a car or at a party, today's teens are physically safer than teens have ever been. They're markedly less likely to get into a car accident and, having less of a taste for alcohol than their predecessors, are less susceptible to drinking's attendant ills.

Psychologically, however, they are more vulnerable than Millennials were: Rates of teen depression and suicide have skyrocketed since 2011. It's not an exaggeration to describe iGen as being on the brink of the worst mental-health crisis in decades. Much of this deterioration can be traced to their phones.

Even when a seismic event - a war, a technological leap, a free concert in the mud - plays an outsize role in shaping a group of young people, no single factor ever defines a generation. Parenting styles continue to change, as do school curricula and culture, and these things matter. But the twin rise of the smartphone and social media has caused an earthquake of a magnitude we've not seen in a very long time, if ever. There is compelling evidence that the devices we've placed in young people's hands are having profound effects on their lives - and making them seriously unhappy.

In the early 1970s, the photographer Bill Yates shot a series of portraits at the Sweetheart Roller Skating Rink in Tampa, Florida. In one, a shirtless teen stands with a large bottle of peppermint schnapps stuck in the waistband of his jeans. In another, a boy who looks no older than 12 poses with a cigarette in his mouth. The rink was a place where kids could get away from their parents and inhabit a world of their own, a world where they could drink, smoke, and make out in the backs of their cars. In stark black-and-white, the adolescent Boomers gaze at Yates's camera with the self-confidence born of making your own choices - even if, perhaps especially if, your parents wouldn't think they were the right ones.

Fifteen years later, during my own teenage years as a member of Generation X, smoking had lost some of its romance, but independence was definitely still in. My friends and I plotted to get our driver's license as soon as we could, making DMV appointments for the day we turned 16 and using our newfound freedom to escape the confines of our suburban neighborhood. Asked by our parents, "When will you be home?," we replied, "When do I have to be?"

But the allure of independence, so powerful to previous generations, holds less sway over today's teens, who are less likely to leave the house without their parents. The shift is stunning: 12th-graders in 2015 were going out less often than eighth-graders did as recently as 2009.

Today's teens are also less likely to date. The initial stage of courtship, which Gen Xers called "liking" (as in "Ooh, he likes you!"), kids now call "talking" - an ironic choice for a generation that prefers texting to actual conversation. After two teens have "talked" for a while, they might start dating. But only about 56 percent of high-school seniors in 2015 went out on dates; for Boomers and Gen Xers, the number was about 85 percent.

The decline in dating tracks with a decline in sexual activity. The drop is the sharpest for ninth-graders, among whom the number of sexually active teens has been cut by almost 40 percent since 1991. The average teen now has had sex for the first time by the spring of 11th grade, a full year later than the average Gen Xer. Fewer teens having sex has contributed to what many see as one of the most positive youth trends in recent years: The teen birth rate hit an all-time low in 2016, down 67 percent since its modern peak, in 1991.

Even driving, a symbol of adolescent freedom inscribed in American popular culture, from Rebel Without a Cause to Ferris Bueller's Day Off, has lost its appeal for today's teens. Nearly all Boomer high-school students had their driver's license by the spring of their senior year; more than one in four teens today still lack one at the end of high school. For some, Mom and Dad are such good chauffeurs that there’s no urgent need to drive. "My parents drove me everywhere and never complained, so I always had rides," a 21-year-old student in San Diego told me. "I didn't get my license until my mom told me I had to because she could not keep driving me to school." She finally got her license six months after her 18th birthday. In conversation after conversation, teens described getting their license as something to be nagged into by their parents - a notion that would have been unthinkable to previous generations.

Independence isn't free - you need some money in your pocket to pay for gas, or for that bottle of schnapps. In earlier eras, kids worked in great numbers, eager to finance their freedom or prodded by their parents to learn the value of a dollar. But iGen teens aren't working (or managing their own money) as much. In the late 1970s, 77 percent of high-school seniors worked for pay during the school year; by the mid-2010s, only 55 percent did. The number of eighth-graders who work for pay has been cut in half. These declines accelerated during the Great Recession, but teen employment has not bounced back, even though job availability has.

Of course, putting off the responsibilities of adulthood is not an iGen innovation. Gen Xers, in the 1990s, were the first to postpone the traditional markers of adulthood. Young Gen Xers were just about as likely to drive, drink alcohol, and date as young Boomers had been, and more likely to have sex and get pregnant as teens. But as they left their teenage years behind, Gen Xers married and started careers later than their Boomer predecessors had.

Gen X managed to stretch adolescence beyond all previous limits: Its members started becoming adults earlier and finished becoming adults later. Beginning with Millennials and continuing with iGen, adolescence is contracting again - but only because its onset is being delayed. Across a range of behaviors - drinking, dating, spending time unsupervised - 18-year-olds now act more like 15-year-olds used to, and 15-year-olds more like 13-year-olds. Childhood now stretches well into high school.

Joescoundrel

01-15-2018, 03:25 PM

^ Continued ...

Why are today's teens waiting longer to take on both the responsibilities and the pleasures of adulthood? Shifts in the economy, and parenting, certainly play a role. In an information economy that rewards higher education more than early work history, parents may be inclined to encourage their kids to stay home and study rather than to get a part-time job. Teens, in turn, seem to be content with this homebody arrangement - not because they're so studious, but because their social life is lived on their phone. They don't need to leave home to spend time with their friends.

If today's teens were a generation of grinds, we'd see that in the data. But eighth-, 10th-, and 12th-graders in the 2010s actually spend less time on homework than Gen X teens did in the early 1990s. (High-school seniors headed for four-year colleges spend about the same amount of time on homework as their predecessors did.) The time that seniors spend on activities such as student clubs and sports and exercise has changed little in recent years. Combined with the decline in working for pay, this means iGen teens have more leisure time than Gen X teens did, not less.

So what are they doing with all that time? They are on their phone, in their room, alone and often distressed.

One of the ironies of iGen life is that despite spending far more time under the same roof as their parents, today's teens can hardly be said to be closer to their mothers and fathers than their predecessors were. "I've seen my friends with their families - they don't talk to them," Athena told me. "They just say 'Okay, okay, whatever' while they're on their phones. They don't pay attention to their family." Like her peers, Athena is an expert at tuning out her parents so she can focus on her phone. She spent much of her summer keeping up with friends, but nearly all of it was over text or Snapchat. "I've been on my phone more than I've been with actual people," she said. "My bed has, like, an imprint of my body."

In this, too, she is typical. The number of teens who get together with their friends nearly every day dropped by more than 40 percent from 2000 to 2015; the decline has been especially steep recently. It’s not only a matter of fewer kids partying; fewer kids are spending time simply hanging out. That's something most teens used to do: nerds and jocks, poor kids and rich kids, C students and A students. The roller rink, the basketball court, the town pool, the local necking spot - they've all been replaced by virtual spaces accessed through apps and the web.

You might expect that teens spend so much time in these new spaces because it makes them happy, but most data suggest that it does not. The Monitoring the Future survey, funded by the National Institute on Drug Abuse and designed to be nationally representative, has asked 12th-graders more than 1,000 questions every year since 1975 and queried eighth- and 10th-graders since 1991. The survey asks teens how happy they are and also how much of their leisure time they spend on various activities, including nonscreen activities such as in-person social interaction and exercise, and, in recent years, screen activities such as using social media, texting, and browsing the web. The results could not be clearer: Teens who spend more time than average on screen activities are more likely to be unhappy, and those who spend more time than average on nonscreen activities are more likely to be happy.

There's not a single exception. All screen activities are linked to less happiness, and all nonscreen activities are linked to more happiness. Eighth-graders who spend 10 or more hours a week on social media are 56 percent more likely to say they're unhappy than those who devote less time to social media. Admittedly, 10 hours a week is a lot. But those who spend six to nine hours a week on social media are still 47 percent more likely to say they are unhappy than those who use social media even less. The opposite is true of in-person interactions. Those who spend an above-average amount of time with their friends in person are 20 percent less likely to say they're unhappy than those who hang out for a below-average amount of time.

If you were going to give advice for a happy adolescence based on this survey, it would be straightforward: Put down the phone, turn off the laptop, and do something - anything - that does not involve a screen. Of course, these analyses don't unequivocally prove that screen time causes unhappiness; it's possible that unhappy teens spend more time online. But recent research suggests that screen time, in particular social-media use, does indeed cause unhappiness. One study asked college students with a Facebook page to complete short surveys on their phone over the course of two weeks. They'd get a text message with a link five times a day, and report on their mood and how much they'd used Facebook. The more they'd used Facebook, the unhappier they felt, but feeling unhappy did not subsequently lead to more Facebook use.

Social-networking sites like Facebook promise to connect us to friends. But the portrait of iGen teens emerging from the data is one of a lonely, dislocated generation. Teens who visit social-networking sites every day but see their friends in person less frequently are the most likely to agree with the statements "A lot of times I feel lonely," "I often feel left out of things," and "I often wish I had more good friends." Teens' feelings of loneliness spiked in 2013 and have remained high since.

Joescoundrel

01-15-2018, 03:27 PM

^ Continued ...

This doesn't always mean that, on an individual level, kids who spend more time online are lonelier than kids who spend less time online. Teens who spend more time on social media also spend more time with their friends in person, on average - highly social teens are more social in both venues, and less social teens are less so. But at the generational level, when teens spend more time on smartphones and less time on in-person social interactions, loneliness is more common.

So is depression. Once again, the effect of screen activities is unmistakable: The more time teens spend looking at screens, the more likely they are to report symptoms of depression. Eighth-graders who are heavy users of social media increase their risk of depression by 27 percent, while those who play sports, go to religious services, or even do homework more than the average teen cut their risk significantly.

Teens who spend three hours a day or more on electronic devices are 35 percent more likely to have a risk factor for suicide, such as making a suicide plan. (That's much more than the risk related to, say, watching TV.) One piece of data that indirectly but stunningly captures kids' growing isolation, for good and for bad: Since 2007, the homicide rate among teens has declined, but the suicide rate has increased. As teens have started spending less time together, they have become less likely to kill one another, and more likely to kill themselves. In 2011, for the first time in 24 years, the teen suicide rate was higher than the teen homicide rate.

Depression and suicide have many causes; too much technology is clearly not the only one. And the teen suicide rate was even higher in the 1990s, long before smartphones existed. Then again, about four times as many Americans now take antidepressants, which are often effective in treating severe depression, the type most strongly linked to suicide.

What's the connection between smartphones and the apparent psychological distress this generation is experiencing? For all their power to link kids day and night, social media also exacerbate the age-old teen concern about being left out. Today's teens may go to fewer parties and spend less time together in person, but when they do congregate, they document their hangouts relentlessly - on Snapchat, Instagram, Facebook. Those not invited to come along are keenly aware of it. Accordingly, the number of teens who feel left out has reached all-time highs across age groups. Like the increase in loneliness, the upswing in feeling left out has been swift and significant.

This trend has been especially steep among girls. Forty-eight percent more girls said they often felt left out in 2015 than in 2010, compared with 27 percent more boys. Girls use social media more often, giving them additional opportunities to feel excluded and lonely when they see their friends or classmates getting together without them. Social media levy a psychic tax on the teen doing the posting as well, as she anxiously awaits the affirmation of comments and likes. When Athena posts pictures to Instagram, she told me, "I'm nervous about what people think and are going to say. It sometimes bugs me when I don't get a certain amount of likes on a picture."

Girls have also borne the brunt of the rise in depressive symptoms among today's teens. Boys' depressive symptoms increased by 21 percent from 2012 to 2015, while girls' increased by 50 percent - more than twice as much. The rise in suicide, too, is more pronounced among girls. Although the rate increased for both sexes, three times as many 12-to-14-year-old girls killed themselves in 2015 as in 2007, compared with twice as many boys. The suicide rate is still higher for boys, in part because they use more-lethal methods, but girls are beginning to close the gap.

These more dire consequences for teenage girls could also be rooted in the fact that they're more likely to experience cyberbullying. Boys tend to bully one another physically, while girls are more likely to do so by undermining a victim’s social status or relationships. Social media give middle- and high-school girls a platform on which to carry out the style of aggression they favor, ostracizing and excluding other girls around the clock.

Social-media companies are of course aware of these problems, and to one degree or another have endeavored to prevent cyberbullying. But their various motivations are, to say the least, complex. A recently leaked Facebook document indicated that the company had been touting to advertisers its ability to determine teens' emotional state based on their on-site behavior, and even to pinpoint "moments when young people need a confidence boost." Facebook acknowledged that the document was real, but denied that it offers "tools to target people based on their emotional state."

In july 2014, a 13-year-old girl in North Texas woke to the smell of something burning. Her phone had overheated and melted into the sheets. National news outlets picked up the story, stoking readers' fears that their cellphone might spontaneously combust. To me, however, the flaming cellphone wasn't the only surprising aspect of the story. Why, I wondered, would anyone sleep with her phone beside her in bed? It's not as though you can surf the web while you're sleeping. And who could slumber deeply inches from a buzzing phone?

Curious, I asked my undergraduate students at San Diego State University what they do with their phone while they sleep. Their answers were a profile in obsession. Nearly all slept with their phone, putting it under their pillow, on the mattress, or at the very least within arm's reach of the bed. They checked social media right before they went to sleep, and reached for their phone as soon as they woke up in the morning (they had to - all of them used it as their alarm clock). Their phone was the last thing they saw before they went to sleep and the first thing they saw when they woke up. If they woke in the middle of the night, they often ended up looking at their phone. Some used the language of addiction. "I know I shouldn't, but I just can't help it," one said about looking at her phone while in bed. Others saw their phone as an extension of their body - or even like a lover: "Having my phone closer to me while I'm sleeping is a comfort."

It may be a comfort, but the smartphone is cutting into teens' sleep: Many now sleep less than seven hours most nights. Sleep experts say that teens should get about nine hours of sleep a night; a teen who is getting less than seven hours a night is significantly sleep deprived. Fifty-seven percent more teens were sleep deprived in 2015 than in 1991. In just the four years from 2012 to 2015, 22 percent more teens failed to get seven hours of sleep.

The increase is suspiciously timed, once again starting around when most teens got a smartphone. Two national surveys show that teens who spend three or more hours a day on electronic devices are 28 percent more likely to get less than seven hours of sleep than those who spend fewer than three hours, and teens who visit social-media sites every day are 19 percent more likely to be sleep deprived. A meta-analysis of studies on electronic-device use among children found similar results: Children who use a media device right before bed are more likely to sleep less than they should, more likely to sleep poorly, and more than twice as likely to be sleepy during the day.

Electronic devices and social media seem to have an especially strong ability to disrupt sleep. Teens who read books and magazines more often than the average are actually slightly less likely to be sleep deprived - either reading lulls them to sleep, or they can put the book down at bedtime. Watching TV for several hours a day is only weakly linked to sleeping less. But the allure of the smartphone is often too much to resist.

Sleep deprivation is linked to myriad issues, including compromised thinking and reasoning, susceptibility to illness, weight gain, and high blood pressure. It also affects mood: People who don't sleep enough are prone to depression and anxiety. Again, it's difficult to trace the precise paths of causation. Smartphones could be causing lack of sleep, which leads to depression, or the phones could be causing depression, which leads to lack of sleep. Or some other factor could be causing both depression and sleep deprivation to rise. But the smartphone, its blue light glowing in the dark, is likely playing a nefarious role.

Joescoundrel

01-15-2018, 03:28 PM

^ Continued ...

The correlations between depression and smartphone use are strong enough to suggest that more parents should be telling their kids to put down their phone. As the technology writer Nick Bilton has reported, it's a policy some Silicon Valley executives follow. Even Steve Jobs limited his kids' use of the devices he brought into the world.

What's at stake isn't just how kids experience adolescence. The constant presence of smartphones is likely to affect them well into adulthood. Among people who suffer an episode of depression, at least half become depressed again later in life. Adolescence is a key time for developing social skills; as teens spend less time with their friends face-to-face, they have fewer opportunities to practice them. In the next decade, we may see more adults who know just the right emoji for a situation, but not the right facial expression.

I realize that restricting technology might be an unrealistic demand to impose on a generation of kids so accustomed to being wired at all times. My three daughters were born in 2006, 2009, and 2012. They're not yet old enough to display the traits of iGen teens, but I have already witnessed firsthand just how ingrained new media are in their young lives. I've observed my toddler, barely old enough to walk, confidently swiping her way through an iPad. I've experienced my 6-year-old asking for her own cellphone. I've overheard my 9-year-old discussing the latest app to sweep the fourth grade. Prying the phone out of our kids' hands will be difficult, even more so than the quixotic efforts of my parents' generation to get their kids to turn off MTV and get some fresh air. But more seems to be at stake in urging teens to use their phone responsibly, and there are benefits to be gained even if all we instill in our children is the importance of moderation. Significant effects on both mental health and sleep time appear after two or more hours a day on electronic devices. The average teen spends about two and a half hours a day on electronic devices. Some mild boundary-setting could keep kids from falling into harmful habits.

In my conversations with teens, I saw hopeful signs that kids themselves are beginning to link some of their troubles to their ever-present phone. Athena told me that when she does spend time with her friends in person, they are often looking at their device instead of at her. "I'm trying to talk to them about something, and they don't actually look at my face," she said. "They're looking at their phone, or they're looking at their Apple Watch." "What does that feel like, when you're trying to talk to somebody face-to-face and they're not looking at you?," I asked. "It kind of hurts," she said. "It hurts. I know my parents' generation didn't do that. I could be talking about something super important to me, and they wouldn't even be listening."

Once, she told me, she was hanging out with a friend who was texting her boyfriend. "I was trying to talk to her about my family, and what was going on, and she was like, 'Uh-huh, yeah, whatever.' So I took her phone out of her hands and I threw it at my wall."

I couldn't help laughing. "You play volleyball," I said. "Do you have a pretty good arm?" "Yep," she replied.

This article has been adapted from Jean M. Twenge's forthcoming book, iGen: Why Today’s Super-Connected Kids Are Growing Up Less Rebellious, More Tolerant, Less Happy - and Completely Unprepared for Adulthood - and What That Means for the Rest of Us.

Joescoundrel

02-19-2018, 11:00 AM

From Esquire online ...

SILICON VALLEY’S TAX-AVOIDING, JOB-KILLING, SOUL-SUCKING MACHINE

Four companies dominate our daily lives unlike any other in human history: Amazon, Apple, Facebook, and Google. We love our nifty phones and just-a-click-away services, but these behemoths enjoy unfettered economic domination and hoard riches on a scale not seen since the monopolies of the gilded age. The only logical conclusion? We must bust up big tech.

SCOTT GALLOWAY

FEB 8, 2018

I've benefited enormously from big tech. Prophet, the consulting firm I cofounded in 1992, helped companies navigate a new landscape being reshaped by Google. Red Envelope, the upscale e-commerce company I cofounded in 1997, never would have made it out of the crib if Amazon hadn't ignited the market's interest in e-commerce. More recently, L2, which I founded in 2010, was born from the mobile and social waves as companies needed a way to benchmark their performance on new platforms.
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The benefits of big tech have accrued for me on another level as well. In my investment portfolio, the appreciation of Amazon and Apple stock restored economic security to my household after being run over in the Great Recession. Finally, Amazon is now the largest recruiter of students from the brand-strategy and digital-marketing courses I teach at NYU Stern School of Business. These firms have been great partners, clients, investments, and recruiters. And the sum of two decades of experience with, and study of, these companies leads me to a singular conclusion: It's time to break up big tech.

Over the past decade, Amazon, Apple, Facebook, and Google - or, as I call them, "the Four" - have aggregated more economic value and influence than nearly any other commercial entity in history. Together, they have a market capitalization of $2.8 trillion (the GDP of France), a staggering 24 percent share of the S&P 500 Top 50, close to the value of every stock traded on the Nasdaq in 2001.

Meanwhile, Facebook and Google (now known as Alphabet) are together worth $1.3 trillion. You could merge the world's top five advertising agencies (WPP, Omnicom, Publicis, IPG, and Dentsu) with five major media companies (Disney, Time Warner, 21st Century Fox, CBS, and Viacom) and still need to add five major communications companies (AT&T, Verizon, Comcast, Charter, and Dish) to get only 90 percent of what Google and Facebook are worth together.

And what of Apple? With a market cap of nearly $900 billion, Apple is the most valuable public company. Even more remarkable is that the company registers profit margins of 32 percent, closer to luxury brands Hermes (35 percent) and Ferrari (29 percent) than peers in electronics. In 2016, Apple brought in $46 billion in profits, a haul larger than that of any other American company, including JPMorgan Chase, Johnson & Johnson, and Wells Fargo. What's more, Apple's profits were greater than the revenues of either Coca- Cola or Facebook. This quarter, it will clock nearly twice the profits that Amazon has produced in its history.

The Four's wealth and influence are staggering. How did Awe get here?

As I wrote in my book, The Four, the only way to build a company with the dominance and mass influence of Google, Amazon, Facebook, and Apple is to appeal to a core human organ that makes adoption of the platform instinctive.

Joescoundrel

02-19-2018, 11:12 AM

GOOGLE: MIND-ALTERING

Our brains are sophisticated enough to ask very complex questions but not sophisticated enough to answer them. Since Homo sapiens emerged from caves, we've relied on prayer to address that gap: We lift our gaze to the heavens, send up a question, and wait for a response from a more intelligent being. "Will my kid be all right?" "Who might attack us?"

As Western nations become wealthier, organized religion plays a smaller role in our lives. But the void between questions and answers remains, creating an opportunity. As more and more people become alienated from traditional religion, we look to Google as our immediate, all-knowing oracle of answers from trivial to profound. Google is our modern-day god. Google appeals to the brain, offering knowledge to everyone, regardless of background or education level. If you have a smartphone or an Internet connection, your prayers will always be answered: "Will my kid be all right?" "Symptoms and treatment of croup. . ." "Who might attack us?" "Nations with active nuclear-weapons programs . . ."

Think back on every fear, every hope, every desire you've confessed to Google's search box and then ask yourself: Is there any entity you've trusted more with your secrets? Does anybody know you better than Google?

FACEBOOK: THE HEART OF THE MATTER

Facebook appeals to the heart. Feeling loved is the key to well-being. Studies of kids in Romanian orphanages who had stunted physical and mental development found that the delay was due not to poor nutrition, as suspected, but to lack of human affection. Yet one of the traits of our species is that we need to love nearly as much as we need to be loved. Susan Pinker, a developmental psychologist, studied the Italian island of Sardinia, where centenarians are six times as common as they are on mainland Italy and ten times as common as in North America. Pinker discovered that among genetic and lifestyle factors, the Sardinians' emphasis on close personal relationships and face-to-face interactions is the key to their superlongevity. Other studies have also found that the deciding factor in longevity isn't genetics but lifestyle, especially the strength of our social bonds.

Facebook gives its 2.1 billion monthly active users tools to fuel our need to love others. It's satisfying to rediscover someone we went to high school with. It's good to know we can keep in touch with friends who move away. It takes minutes, with a "like" on a baby pic or a brief comment on a friend's heartfelt post, to reinforce friendships and family relationships that are important to us.

AMAZON: ALWAYS CONSUMING

What sight is to the eyes and sound is to the ears, the feeling of more, of insatiety, is to the gut. We crave more stuff psychologically just as the stomach craves more sugar, more carbs, after an indulgent meal. Originally this instinct operated in the service of self-preservation: Having too little meant starvation and certain death, whereas too much was rare, a bloat or a hangover. But open your closets or your cupboards right now, and you'll probably find you have ten to a hundred times as much as you need. Rationally, we know this makes no sense, but society and our higher brain haven't caught up to the instinct of always feeling like we need more.

Amazon is the large intestine of the consumptive self. It stores nutrients and distributes them to the cardiovascular system of the 64 percent of American households who are Prime members. It has adopted the best strategy in the history of business - "more for less" - and deployed it more effectively and efficiently than any other firm in history.

APPLE: SET TO VIBRATE

The second-most-powerful instinct after survival is procreation. As sexual creatures, we want to signal how elegant, smart, and creative we are. We want to signal power. Sex is irrational, luxury is irrational, and Apple learned very early on that it could appeal to our need to be desirable - and in turn increase its profit margins - by placing print ads in Vogue, having supermodels at product launches, and building physical stores as glass temples to the brand.

A Dell computer may be powerful and fast, but it doesn't indicate membership in the innovation class as a MacBook Air does. Likewise, the iPhone is something more than a phone, or even a smartphone. Consumers aren't paying $1,000 for an iPhone X because they're passionate about facial recognition. They're signaling they make a good living, appreciate the arts, and have disposable income. It’s a sign to others: If you mate with me, your kids are more likely to survive than if you mate with someone carrying an Android phone. After all, iPhone users on average earn 40 percent more than Android users. Mating with someone who is on the iOS platform is a shorter path to a better life. The brain, the heart, the large intestine, and the groin: By appealing to these four organs, the Four have entrenched their services, products, and operating systems deeply into our psyches. They've made us more discerning, more demanding consumers. And what's good for the consumer is good for society, right?

Well, yes and no. The Four have so much power over our lives that most of us would be rocked to the core if one or more of them were to disappear. Imagine not being able to have an iPhone, or having to use Yahoo or Bing for search, or losing years' worth of memories you've posted on Facebook. What if you could no longer order something with one click on the Amazon app and have it arrive tomorrow?

At the same time, we’ve handed over so much of our lives to a few Silicon Valley executives that we've started talking about the downsides of these firms. As the Four have become increasingly dominant, a murmur of concern—and even resentment—has begun to make itself heard. After years of hype, we've finally begun to consider the suggestion that the government, or someone, ought to put the brakes on.

Not all of the arguments are equally persuasive, but they're worth restating before we get to the real reason I believe we ought to break up big tech.

Joescoundrel

02-19-2018, 02:08 PM

^ Continued from above ...

Big tech learned from the sins of the original gangster, Microsoft. The colossus at times appeared to feel it was above trafficking in PR campaigns and lobbyists to soften its image among the public and regulators. In contrast, the Four promote an image of youth and idealism, coupled with evangelizing the world-saving potential of technology.

The sentiment is sincere, but mostly canny. By appealing to something loftier than mere profit, the Four are able to satisfy a growing demand among employees for so-called purpose-driven firms. Big tech's tinkerer-in-the-garage mythology taps into an old American reverence for science and engineering, one that dates back to the Manhattan Project and the Apollo program. Best of all, the companies' vague, high-minded pronouncements - "Think Different," "Don't Be Evil" - provide the ultimate illusion. Political progressives are generally viewed as well-meaning but weak, an image that offered the perfect cover for companies that were becoming hugely powerful.

Facebook's Sheryl Sandberg told women to "lean in" because she meant it, but she also had to register the irony of her message of female empowerment, set against a company that emerged from a site originally designed to rank the attractiveness of Harvard undergraduates, much less a firm destroying tens of thousands of jobs in an industry that hires a relatively high number of female employees: media and communications.

These public-relations efforts paid off handsomely but also set the companies up for a major fall. It's an enormous letdown to discover that the guy who seems like the perfect gentleman is in fact addicted to opioids and a jerk to his mother. It's even worse to learn that he only hung out with you because of your money (clicks).

In my experience as the founder of several early Internet firms, the people who work for the Four are no more or less evil than people at other successful companies. They’re a bit more educated, a little smarter, and much luckier, but like their parents before them, most are just trying to find their way and make a living. Sure, many of them would be happy to help out humanity. But presented with the choice between the betterment of society or a Tesla, most would opt for the Tesla - and the Tesla dealerships in Palo Alto are doing well, really well. Does this make them evil? Of course not. It simply makes them employees at a for-profit firm operating in a capitalist society.

Our government operates on an annual budget of approximately 21 percent of GDP, money that is used to keep our parks open and our military armed. Does big tech pay its fair share? Most would say no. Between 2007 and 2015, Amazon paid only 13 percent of its profits in taxes, Apple paid 17 percent, Google paid 16 percent, and Facebook paid just 4 percent. In contrast, the average tax rate for the S&P 500 was 27 percent.

So, yes, the Four do avoid taxes . . . and so do you. They're just better at it. Apple, for example, uses an accounting trick to move its profits to domains such as Ireland, which results in lower taxes for the most profitable firm in the world. As of September 2017, the company was holding $250 billion overseas, a hoard that is barely taxed and should never have been abroad in the first place. That means a U. S. company is holding enough cash overseas to buy Disney and Netflix.

Apple is hardly alone. General Electric also engages in massive tax avoidance, but we’re not as angry about it, as we aren’t in love with GE. The fault here lies with us, and with our democratically elected government. We need to simplify the tax code - complex rules tend to favor those who can afford to take advantage of them - and we need to elect officials who will enforce it.

Joescoundrel

02-19-2018, 02:16 PM

^ Continued from above ...

The destruction of jobs by the Four is significant, even frightening. Facebook and Google likely added $29 billion in revenue in 2017. To execute and service this additional business, they will create twenty thousand new, high-paying jobs.

The other side of the coin is less shiny. Advertising - whether digital or analog - is a low-growth (increasingly flat) business, meaning that the sector is largely zero-sum. Google doesn't earn an extra dollar by growing the market; it takes a dollar from another firm. If we use the five largest media-services firms (WPP, Omnicom, Publicis, IPG, and Dentsu) as a proxy for their industry, we can estimate that $29 billion in revenue would have required about 219,000 traditional advertising professionals to service. That translates to 199,000 creative directors, copywriters, and agency executives deciding to "spend more time with their families" each year - nearly four Yankee Stadiums filled with people dressed in black holding pink slips.

The economic success stories of yesterday employed many more people than the firms that dominate the headlines today. Procter & Gamble, after a run-up in its stock price in 2017, has a market capitalization of $233 billion and employs ninety-five thousand people, or $2.4 million per employee. Intel, a new-economy firm that could be more efficient with its capital, enjoys a market cap of $209 billion and employs 102,000 people, or $2.1 million per employee. Meanwhile, Facebook, which was founded fourteen years ago, boasts a $542 billion market cap and employs only twenty-three thousand people, or $23.4 million per employee - ten times that of P&G and Intel.

Granted, we've seen job destruction before. But we've never seen companies quite this good at it. Uber set a new (low) bar with $68 billion spread across only twelve thousand employees, or $5.7 million per employee. It's hardly obvious that a ride-share company - which requires actual drivers on the actual roads - would be the one to arbitrage the middle class with a Houdini move that would have Henry Ford spinning in his grave.

But Uber managed it by creating a two-class workforce, complete with a new classification: "driver-partners," in other words, contractors. Keeping them off the payroll means that Uber's investors and twelve thousand white-collar employees do not share any of the company’s $68 billion in equity with its "partners." In addition, the firm is not inconvenienced with paying health or unemployment insurance and paid time off for any of its two-million-strong driver workforce.

Big tech’s job destruction makes an even stronger case for getting these firms to pay their fair share of taxes, so that the government can soften the blow with retraining and social services. We should be careful, however, not to let job destruction be the lone catalyst for intervention. Job replacement and productivity improvements - from farmers to factory workers, and factory workers to service workers, and service workers to tech workers - are part of the story of American innovation. It's important to let our freaks of success fly their flag.

Joescoundrel

02-19-2018, 02:28 PM

^ Continued from above ...

Getting warmer. Having your firm weaponized by foreign adversaries to undermine our democratic election process is bad . . . really bad. During the 2016 election, Russian troll pages on Facebook paid to promote approximately three thousand political ads. Fabricated content reached 126 million users. It doesn't stop there - the GRU, the Russian military-intelligence agency, has lately taken a more bipartisan approach to sowing chaos. Even after the election, the GRU has used Facebook, Google, and Twitter to foment racially motivated violence. The platforms invested little or no money or effort to prevent it. The GRU purchased Facebook ads in rubles: literally and figuratively a red flag.

If you're a country club with a beach or a pool, it's more profitable, in the short run, not to have lifeguards. There are risks to that business model, as there are to Facebook's dependence on mainly algorithmic moderation, but it saves a lot of money. The notion that we can expect big tech to allocate the requisite resources, of the companies' own will, for the social good is similar to the idea that Exxon will take a leadership position on global warming. It's not going to happen.

However, the alarm for trust busting, not just regulation, rang for me in November, when Senate Intelligence Committee chairman Richard Burr pleaded with the general counsels of Facebook, Google, and Twitter, "Don't let nation-states disrupt our future. You're the front line of defense for it." This represented a seminal moment in our history, when our elected officials handed over our national defense to firms whose business model is to nag you about the shoes you almost bought, and remind you of your friends' birthdays.

They should be our front line against our enemies?

Let's be clear, our front line of defense has been, and must continue to be, the Army, Navy, Air Force, and Marines. Not the Zuck.

It's not just federal officials who have folded in the face of big tech. As part of their bid for Amazon’s second headquarters, state and city officials in Chicago proposed to let Amazon keep $1.3 billion in employee payroll taxes and spend this money as the company sees fit. That's right: Chicago offered to transfer its tax authority to Amazon and trusts the Seattle firm to allocate taxes in a manner best for Chicago's residents.

The surrender of our government only gets worse from there. If you want to manufacture and sell a Popsicle to children, you must undergo numerous expensive FDA tests and provide thorough labeling that outlines the ingredients, calories, and sugar content of the treat. But what warning labels are included in Instagram's user agreement? We've now seen abundant research indicating that social-media platforms are making teens more depressed. Ask yourself: If ice cream were making teens more prone to suicide, would we shrug and seat the CEO of Dreyer's next to the president at dinners in Silicon Valley?

Anyone who doesn't believe these products are the delivery systems for tobacco-like addiction has never separated a seven-year-old from an iPad in exchange for a look that communicates a plot to kill you. If you don't believe in the addictive aspects of these platforms, ask yourself why American teenagers are spending an average of five hours a day glued to their Internet- connected screens. The variable rewards of social media keep us checking our notifications as though they were slot machines, and research has shown that children and teens are particularly sensitive to the dopamine cravings these platforms foster. It's no accident that many tech companies' execs are on the record saying they don't give their kids access to these devices.

All of these are valid concerns. But none of them alone, or together, is enough to justify breaking up big tech. The following are reasons I believe the Four should be broken up.

Joescoundrel

02-19-2018, 02:41 PM

^ Continued from above ...

The Purpose of an Economy

Ganesh Sitaraman, professor at Vanderbilt Law School, argues that the U. S. needs the middle class, that the Constitution was designed for a balanced share of wealth for our representative democracy to work. If the rich have too much power, it can lead to an oligarchy. If the poor have too much power, it can lead to a revolution. So the middle class needs to be the rudder that steers American democracy on an even keel.

I believe that the primary purpose of the economy, and one of its key agents, the firm, is to create and sustain the middle class. The U. S. middle class from 1941 to 2000 was one of the most ferocious sources of good in world history. The American middle class financed, fought, and won good wars; took care of the aged; funded a cure for polio; put men on the moon; and showed the rest of the world that self-interest, and the consumption and innovation it inspired, could be an engine for social and economic transformation.

The upward spiral of an economy depends on the circular flow between households and companies. Households offer resources and labor, and companies offer goods and jobs. Competition motivates the invention and distribution of better offerings (happy hour, rear-view camera, etc.), and the big wheel spins round and round. Big tech creates enormous stakeholder value. So why are we witnessing, for the first time in decades, other countries grow their middle class while ours is declining? If an economy is meant to sustain a middle class, and the social stability it fosters, then our economy is failing.

Without a doubt, there have been tremendous gains in productivity in the U. S. over the past thirty years. It would be hard to deny that the American consumer, at every level, has become the envy of the free world. Yet the productivity boost and the elevation of the consumer to modern-day nobility have created a dystopia in which we’ve traded well- paying jobs and economic security for powerful phones and coconut water delivered in under an hour.

How did that happen? Since the turn of the millennium, firms and investors have fallen in love with companies whose ability to replace humans with technology has enabled rapid growth and outsize profit margins. Those huge profits attract cheap capital and render the rest of the sector flaccid. Old-economy firms and fledgling start-ups have no shot.

The result is a winner-takes-all economy, both for companies and for people. Society is bifurcating into those who are part of the innovation economy (lords) and those who aren't (serfs). One great idea will make a twenty-something the darling of venture capital, while those who are average, or even just unlucky (most of us), have to work much harder to save for retirement.

It's never been easier to be a billionaire or harder to be a millionaire. It's painfully clear that the invisible hand, for the past three decades, has been screwing the middle class. For the first time since the Great Depression, a thirty-year-old is less well-off than his or her parents at thirty.

Should we care? What if these icons of innovation are the disrupters we need to keep our economy fit? Isn't there a chance we'll come through the other end of the tunnel with a stronger economy and higher wages? Already there's evidence that this isn't happening. In fact, the bifurcation effect seems to be gaining momentum. It's likely the biggest threat to our society. Many will argue it's the world we live in. But isn't the world what we make of it? And we have consciously shifted the mission of the U. S. from producing millions of millionaires to producing one trillionaire. Alexa, is this a good thing?

Joescoundrel

02-19-2018, 03:11 PM

^ Continued from above ...

Markets Are Failing, Everywhere

Right now we are in the midst of a dramatic market failure, one in which the government has been lulled by the public's fascination with big tech. Robust markets are efficient and powerful, yet just as football games don’t work without referees who regularly step in, throw flags, and move one team backward or forward, unfettered capitalism gave us climate change, the mortgage crisis, and U. S. health care.

Monopolies themselves aren't always illegal, or even undesirable. Natural monopolies exist where it makes sense to have one firm achieve the requisite scale to invest and offer services at a reasonable price. But the tradeoff is heavy regulation. Florida Power & Light serves ten million people; its parent company, NextEra Energy, has a market cap of $72 billion. However, pricing and service standards are regulated by people who are fiduciaries for the public.

The Four, by contrast, have managed to preserve their monopoly-like powers without heavy regulation. I describe their power as "monopoly-like," since, with the possible exception of Apple, they have not used their power to do the one thing that most economists would describe as the whole point of assembling a monopoly, which is to raise prices for consumers.

Nevertheless, the Four's exploitation of our knee-jerk antipathy to big government has been so effective that it's led most of us to forget that competition - no less than private property, wage labor, voluntary exchange, and a price system - is one of the indispensable cylinders of the capitalist engine. Their massive size and unchecked power have throttled competitive markets and kept the economy from doing its job - namely, to promote a vibrant middle class.

Air Supply

How do they do it? It's useful here to remember how Microsoft killed Netscape in the 1990s. The process starts innocently enough, as a firm builds an outstanding product (Windows) that becomes a portal to an entire sector - what we'd now call a platform. To sustain its growth, the company points the portal at its own products (Internet Explorer) and bullies its partners (Dell) to shut out the competition. Even though Netscape had the more popular browser, with over 90 percent market share, it couldn't compete with Microsoft's implicit subsidies for Internet Explorer.

It's happening everywhere across the Four, whether it's the slow takeover of the entire first page of search results that Google can better monetize, substandard products on your iPhone's home screen (like Apple Music), coordinating all assets of the firm (Facebook) to arrest and destroy a threat (Snap), or information-age steel dumping via fulfillment build-out and predatory pricing no other firm can access the capital to match (Amazon).

(Un)Natural Monopolies

Maybe the consumer is better off with these "natural" monopolies. The Department of Justice didn't think so. In 1998, the federal government filed suit against Microsoft, alleging anticompetitive practices. During the trial, one witness reported that Microsoft executives had said they wanted to “cut off Netscape’s air supply” by giving away Internet Explorer for free.

In November 1999, a district court found that Microsoft had violated antitrust laws and subsequently ordered the company to be broken into two. (One company would sell Windows; the other would sell applications for Windows.) The breakup order was overruled by an appeals court, and ultimately Microsoft agreed to a settlement with the government that sought to curb the company's monopolistic practices by less stringent means.

The settlement was criticized by some for being too lenient, but it’s worth asking whether Google - today worth $770 billion and the object of affection for any free-market evangelist - would exist if the DOJ hadn't put Microsoft on notice regarding the infanticide of promising upstarts. In the absence of the antitrust case, Microsoft likely would have leveraged its market dominance to favor Bing over Google, just as it had used Windows to euthanize Netscape.

Indeed, the DOJ's case against Microsoft may have been one of the most market-oxygenating acts in business history, one that unleashed trillions of dollars in shareholder value. The concentration of power achieved by the Four has created a market desperate for oxygen. I've sat in dozens of VC pitches by small firms. The narrative has become universal and static: "We don't compete directly with the Four but would be great acquisition candidates." Companies thread this needle or are denied the requisite oxygen (capital) to survive infancy. IPOs and the number of VC-funded firms have been in steady decline over the past few years.

Unlike Microsoft, which was typecast early on as the "Evil Empire," Google, Apple, Facebook, and Amazon have combined savvy public-relations efforts with sophisticated political lobbying operations - think Oprah Winfrey crossed with the Koch brothers - to make themselves nearly immune to the scrutiny endured by Microsoft.

Joescoundrel

02-20-2018, 03:42 PM

^ Continued from above ...

The Four's unchecked power manifests most often as a restraint of competition. Consider: Amazon has become such a dominant force that it's now able to perform Jedi mind tricks and inflict pain on potential competitors before it enters the market. Consumer stocks used to trade on two key signals: the underlying performance of the firm (Pottery Barn's sales per square foot are up 10 percent) and the economic macro-climate (more housing starts). Now, however, private and public investors have added a third key signal: what Amazon may or may not do in the respective sector. Some recent examples:

The day Amazon announced it would enter the dental-supply business, dental-supply companies' stock fell 4 to 5 percent. When Amazon reported it would sell prescription drugs, pharmacy stocks fell 3 to 5 percent.

Within twenty-four hours of the Amazon - Whole Foods acquisition announcement, large national grocery stocks fell 5 to 9 percent.

When the subject of monopolistic behavior comes up, Amazon’s public-relations team is quick to cite its favorite number: 4 percent - the share of U. S. retail (online and offline) Amazon controls, only half of Walmart’s market share. It's a powerful defense against the call to break up the behemoth. But there are other numbers. Numbers you typically won’t see in an Amazon press release:

• 34 percent: Amazon's share of the worldwide cloud business

• 44 percent: Amazon's share of U. S. online commerce

• 64 percent: U. S. households with Amazon Prime

• 71 percent: Amazon's share of in-home voice devices

• $1.4 billion: Amount of U. S. corporate taxes paid by Amazon since 2008, versus $64 billion for Walmart. (Amazon has added the entire value of Walmart to its market cap in the past twenty-four months.)

What about Facebook? Eighty-five percent of the time we spend on our phones is spent using an app. Four of the top five apps globally—Facebook, Instagram, WhatsApp, and Messenger - are owned by Facebook. And the top four have allied, under the command of the Zuck, to kill the fifth - Snap Inc. What this means is that our phones are no longer communications vehicles; they're delivery devices for Facebook, Inc.

Facebook even has an internal database that tells it when a competitive app is gaining traction with its users, so that the social network can either acquire the firm (as it did with Instagram and WhatsApp) or kill it by mimicking its features (as it's trying to do with Stories and Bonfire, which are aimed at Snapchat and Houseparty).

Google, for its part, now commands a 92 percent share of a market, Internet search, that is worth $92.4 billion worldwide. That's more than the entire advertising market of any country except the U. S. Search is now a larger market than the following global industries:

• paper and forest products: $81 billion

• construction and engineering: $79 billion

• real estate management and development: $76 billion

• gas utilities: $58 billion

How would we feel if one company controlled 92 percent of the global construction and engineering trade? Or 92 percent of the world’s paper and forest products? Would we worry that their power and influence had breached a reasonable threshold, or would we just think they were awesome innovators, as we do with Google? And then there's Apple, the most successful firm selling a low-cost product at a premium price. The total material cost for the iPhone 8 Plus is $288, a fraction of the $799 price tag.

Put another way, Apple has the profit margin of Ferrari with the production volume of Toyota. Apple's users are among the most loyal, too. It has a 92 percent retention rate among consumers, compared with just 77 percent for Samsung users. In February 2017, 79 percent of all active iOS users had updated to the most recent software, versus just 1.2 percent of all active Android devices.

Apple uses its privileged place in consumers' lives to instill monopoly-like powers in its approach to competitors like Spotify. In 2016, the firm denied an update to the iOS Spotify app, essentially blocking iPhone users' access to the latest version of the music-streaming service. While Spotify has double the subscribers of Apple Music, Apple makes up the discrepancy by placing a 30 percent tax on its competition.

Joescoundrel

02-20-2018, 03:49 PM

^ Continued from above ...

Apple is not shy about using its popularity among consumers to its advantage. It was recently discovered that Apple has been purposely slowing down performance on outdated iPhone models, a strategy that is likely to entice users to upgrade sooner than they would have otherwise. This is the confidence of a monopoly.

In the late nineteenth century, the term trust came into use as a way to describe big businesses that controlled the majority of a particular market. Teddy Roosevelt gained a reputation as the original "trust buster" by breaking up the beef and railroad trusts, and filing forty more antitrust suits during his presidency. Fast-forward a hundred years, to 2016, and we find candidate Trump announcing that a Trump administration would not approve the AT&T–Time Warner merger "because it's too much concentration of power in the hands of too few." A year later, his Justice Department sued to block it.

So our presidents are still fighting the good fight, right? Well, let's break this down. AT&T has 139 million wireless subscribers, sixteen million Internet subscribers, and twenty-five million video subscribers, about twenty million of which were acquired from DirecTV. Time Warner owns content-producing brands such as HBO, Warner Bros., TNT, TBS, and CNN. A vertical merger between the two companies could, in theory, create a megacorporation capable of creating and distributing content across its network of millions of wireless-phone, Internet, and video subscribers.

Too much power in the hands of too few? Maybe. But if content-and-distribution heft is what we're worried about, then Teddy would have been knocking on Jeff's, Tim's, Larry's, and Mark's doors a decade ago. Already each of the Four has content and distribution that dwarfs a combined AT&T–Time Warner:

• Amazon spent $4.5 billion on original video in 2017, second only to Netflix's $6 billion. Prime Video has launched in more than two hundred countries and recently struck a $50 million deal with the NFL to stream ten Thursday-night games. Amazon controls a 71 percent share in voice technology and has an installed distribution base of 64 percent of American households through Prime. Name a cable company with a 64 percent market share - I'll wait. In addition, Amazon controls more of the market in cloud computing than the next five largest competitors combined. Alexa, does this foster innovation?

• Apple is set to spend $1 billion on original content this year. The company controls 2.2 million apps and set a record in 2013 when the number of songs it sold on iTunes hit twenty-five billion. Apple's library now includes forty million songs, which can be distributed across the company's one billion active iOS devices, and that’s not even mentioning its television and video offerings. But AT&T needs to sell Cartoon Network?

• Facebook owns a torrent of content created by its 2.1 billion monthly active users. Through its site and its apps, the company reaches 66 percent of U. S. adults. Facebook plans to spend $1 billion on original content. It’s the world’s most prolific content machine, dominating the majority of phones worldwide. Now "what’s on your mind?"

• Four hundred hours of video are uploaded to YouTube every minute, which means that Google has more video content than any other entity on earth. It also controls the operating system on two billion Android devices. But AT&T needs to divest Adult Swim?

Perhaps Trump is right that the merger of AT&T and Time Warner is unreasonable, but if so, then we should have broken up the Four ten years ago. Each of the Four, after all, wields a harmful monopolistic power that leverages market dominance to restrain trade. But where is the Department of Justice? Where are the furious Trump tweets? Convinced that the guys on the other side of the door are Christlike innovators, come to save humanity with technology, we've allowed our government to fall asleep at the wheel.

Margrethe Vestager, the EU commissioner for competition, is the only government official in a Western country whose testicles have descended - who is not afraid of, or infatuated with, big tech. Last May, she levied a $122 million fine against Facebook for lying to the EU about its ability to share data between Facebook and WhatsApp, and a month later she penalized Google $2.7 billion for anticompetitive practices.

This was a good start, but it's worth noting that those fines are mere mosquito bites on the backs of elephants. The Facebook fine represented 0.6 percent of the acquisition price of WhatsApp, and Google's amounted to just 3 percent of its cash on hand. We are issuing twenty-five-cent parking tickets for not feeding a meter that costs $100 every fifteen minutes. We are telling these companies that the smart, shareholder-friendly thing to do is obvious: Break the law, lie, do whatever it takes, and then pay a (relatively) anemic fine if you happen to get caught.

The monopolistic power of big tech serves as a macho test for capitalists. The embrace of the innovation class makes us feel powerful. We like success, especially outrageous success, and we’re inspired by billionaires and the incredible companies they founded. We also have a gag reflex when it comes to regulation, one that invites unattractive labels. Since I started suggesting that Amazon should be broken up, Stuart Varney of Fox News, a charming guy, has taken to introducing me on-air as a socialist. Any day now, I suspect he'll start calling me European.

There’s no question that the markets sent a strong signal in 2017 that our economy is sated on regulation. But there's a difference between regulation and trust busting. What's missing from the story we tell ourselves about the economy is that trust busting is meant to protect the health of the market. It's the antidote to crude, ham-handed regulation. When markets fail, and they do, we need those referees on the field who will throw a yellow flag and restore order. We are so there.

The tremendous success of the Four - which alone accounted for 40 percent of the gains in the S&P 500 for the month of October - wallpapers over the fact that, as a whole, the markets in which they operate are not healthy. Late last year, Refinery29 and BuzzFeed, two promising digital-marketing fledglings, announced layoffs, while Criteo, an ad-tech firm, shed 50 percent of its market capitalization. Why? Because there is Facebook, there is Google, and then there is everyone else. And all of those other firms, including Snap Inc., are dead; they just don't know it yet.

Are we sure all these companies deserve to die? Or is it the case that our markets are failing and preventing the development of a healthy ecosystem with dozens of digital-marketing firms growing, hiring, and innovating?

Joescoundrel

02-20-2018, 03:55 PM

^ Continued from above ...

Search...Your Feelings

Imagine two markets. One that includes the firms below:

Amazon | Apple | Facebook | Google

And another that includes these independent firms:

As Darth Vader urged his son, I want you to "search your feelings" and answer which market would:

Create more jobs and shareholder value.

While trust busting is typically bad for stocks in the short run, busting up Ma Bell unleashed a torrent of shareholder growth in telecommunications. Similarly, Microsoft, despite its run-in with the DOJ in the 1990s, just hit an all-time high. In addition, it's reasonable to believe that Amazon and Amazon Web Services may be worth more as separate firms than they are as one.

Inspire more investment.

There are half as many publicly traded U. S. firms than there were twenty-two years ago, and most firms in the innovation economy understand that their most likely - or only - path to exist is to be acquired by big tech. An absence of buyers makes for an economy in which the two options are to go big (become Google) or go home (go out of business). While home runs provide good theater, the doubles and triples of acquisitions by medium-sized firms are likely a stronger engine of growth.

Broaden the tax base.

The aggregation of power has resulted in firms that have so much political clout and resources that they can bring their effective tax rates well below what midsize companies pay, creating a regressive tax system.

Why should we break up big tech? Not because the Four are evil and we’re good. It’s because we understand that the only way to ensure competition is to sometimes cut the tops off trees, just as we did with railroads and Ma Bell. This isn't an indictment of the Four, or retribution, but recognition that a key part of a healthy economic cycle is pruning firms when they become invasive, cause premature death, and won't let other firms emerge. The breakup of big tech should and will happen, because we're capitalists. It's time.

Joescoundrel

02-28-2018, 07:15 AM

From Vice ...

A $10 Billion Lawsuit Could Finally Unmask The Creator Of Bitcoin

By David Gilbert Feb 27, 2018

For most of the last decade, internet snoops, journalists and bitcoin enthusiasts have been trying to unmask Satoshi Nakamoto, the mysterious creator of bitcoin who holds almost 1 million of the digital coins - currently worth $10 billion.

Now a bombshell lawsuit against the man who publicly claims to be Nakamoto could finally answer that question.

Craig Wright outed himself in 2016 as the creator of the world's most valuable cryptocurrency, but his claims were met with widespread skepticism.

Now legal experts believe that the lawsuit, being brought by the family of a close collaborator of Wright, will once and for all confirm the true identity of Satoshi Nakamoto.

Wright, an Australian cryptographer has largely disappeared from public view since saying he was going to provide no more proof of his claim.

Now he's facing a lawsuit being brought by the estate of Dave Kleiman, a computer scientist and cybersecurity expert, who many had identified as a possible answer to the question of who created bitcoin.

The lawsuit claims Wright stole 1,100,111 bitcoins that rightfully belonged to Kleinman and would currently have a market value of $10,236,532,855. As well as the missing bitcoin, Kleinman's estate is alleging that Wright "unlawfully, willfully, and maliciously misappropriated trade secrets belonging to Dave's estate relating to blockchain-based technologies."

Wright issued a single-worded response to the lawsuit when asked about it on Twitter late Monday: "Greed."

According to one expert, the lawsuit would necessarily demand the unmasking of the true identity of Satoshi Nakamoto:

The Kleinman estate is being represented by Boies Schiller Flexner, the firm that represented Al Gore in his Supreme Court case challenging the results of the 2000 presidential election.

However, a blog post by bitcoin security specialists WizSec has poured cold water on the claims made by both Wright and the Kleinman estate, suggesting that neither party owned the bitcoin being claimed.

"The very existence of those bitcoins in the first place is just another fantasy," the post says. "The lawsuit is a nonsensical fight over unrelated funds that never belonged to either party."

WHO WAS DAVE KLEINMAN?

A former helicopter technician in the U.S. Army, Kleinman was paralyzed and wheelchair-bound following a serious motorcycle accident. He met Wright in an online cryptography forum in 2003 and according to the lawsuit, the pair worked together on the white paper that outlined how bitcoin and the blockchain would work, published under the pseudonym Satoshi Nakamoto in 2008.

The pair also formed a Florida-based company, W&K Info Defense Research LLC, in 2011 to focus on cybersecurity.

However, the lawsuit also says it is "unclear whether Craig, Dave, and/or both created bitcoin."

It continues: "For reasons not yet completely clear, they chose to keep their involvement in Bitcoin hidden from most of their family and friends. It is undeniable, however, that Craig and Dave were involved in bitcoin from its inception and that they both accumulated a vast wealth of bitcoins from 2009 through 2013."

In an email sent to Louis Kleinman, Dave's 94-year-old father, 10 months after his son's death, Wright claims: "Your son Dave and I are two of the three key people behind bitcoin."

Kleinman died just months before bitcoin really hit the mainstream, in April 2013, after a long battle with Methicillin-resistant Staphylococcus Aureus (MRSA). At the time of Kleinman’s death, no one in his family was aware of the extent of his involvement in creating bitcoin or that he had accumulated "an incredible sum of bitcoins."

The lawsuit claims that Wright took advantage of this fact to seize bitcoin belonging to Kleinman by forging a series of contracts that purported to transfer the assets to Wright or companies controlled by him.

To do this, Wright backdated contracts and used a computer-generated font called Otto to forge Dave Kleiman's signature, according to the lawsuit.

GRUESOME SCENE

The circumstances of his death are also couched in mystery. "Dave was found dead in his home. The scene of Kleiman's death was gruesome. His body was decomposing, there were wheelchair tracks of blood and fecal matter, open bottles of alcohol, and a loaded handgun next to him. A bullet hole in his mattress was found," the lawsuit says.

Wright and Kleinman operated a bitcoin mining operation which saw them collect over one million bitcoin, which was held in trusts based in the Seychelles, the U.K. and Singapore.

Wright is currently living in London where he is chief scientist of blockchain startup nChain. In his role, Wright has filed hundreds of patents related to bitcoin and blockchain technology.

After many people questioned his claims of being Nakamoto in 2016, Wright said he would be providing no further public proof of his claim.

The identity of the person or persons who created bitcoin has been a topic of interest for the media and the bitcoin community for many years, with multiple names being floated, including Gavin Andresen, Hal Finney, Nick Szabo, and most infamously Dorian Nakamoto.

Joescoundrel

03-08-2018, 08:43 AM

Is social media really affecting academic performance?

AFP Relaxnews / 08:11 PM February 22, 2018

Although many parents may be worried that the rise of social media is distracting children from their studies, new European research suggests that using sites such as Snapchat, Facebook or Instagram has a minimal effect on academic performance.

Carried out by researchers from the University of Bamberg, Germany, the new study set out to clarify whether social media does in fact have a negative impact on school grades, looking at 59 studies that included more than 30,000 young people worldwide.

“There are several contradictory single studies on this subject and this has made it difficult previously to properly assess all results,” explained co-author Caroline Marker. Although some studies report that social media has a negative impact on school performance, others show a positive influence, while some have failed to find any relationship at all.

In the new review the team found that as they had expected, students who used social media intensively to communicate to their peers about school-related topics actually tended to have slightly higher, not lower grades.

In addition, they found that those who were particularly active on social media did not spend less time studying.

However, those who used social networking sites very frequently, regularly post messages and photos, did have slightly lower grades, although the team stressed that the negative effect, is very small.

Those who used social media while studying or doing homework also had slightly worse grades than students who didn’t use the sites, possibly because this form of multi-tasking distracted students from their work.

Commenting on whether social media could be causing the slight decrease in grades, or whether students who already have lower grades are more easily drawn to the distraction of social media, co-author Professor Markus Appel said, “We cannot answer this question. Both directions of cause and effect are possible, but they are not very pronounced.”

He concluded, “Concerns regarding the allegedly disastrous consequences of social networking sites on school performance are unfounded.”

“Nevertheless, parents should take an interest in what their kids are doing on social media, know the social networks and be willing to understand the usage patterns,” he continued. “The more open-minded parents are with respect to their children’s online activities, the better they will be able to communicate with them.”

The findings also come just weeks after a study of more than 1.1 million U.S. teens found that those who spend a large amount of time on their smartphone, for example using social media or texting friends, are more likely to be unhappy than those who spend time doing non-screen activities such as sports, reading newspapers and magazines, and face-to-face social interaction.

However, the team also found that those who spent a small amount of time in front of a screen were actually the happiest, and now recommend limiting use to no more than two hours a day.

The German study can be found published online in the journal Educational Psychology Review. JB

Joescoundrel

03-27-2018, 09:41 AM

Facebook is facing an existential crisis

by Dylan Byers @CNNMoney

March 19, 2018: 10:40 AM ET

The Cambridge Analytica scandal has done immense damage to the brand, sources across the company believe. It will now take a Herculean effort to restore public trust in Facebook's commitment to privacy and data protection, they said. Outside observers think regulation has suddenly become more likely, and yet CEO Mark Zuckerberg appears missing in action.

The scandal also highlights a problem that is built into the company's DNA: Its business is data exploitation. Facebook makes money by, among other things, harvesting your data and selling it to app developers and advertisers. Preventing those buyers from passing that data to third parties with ulterior motives may ultimately be impossible.

Indeed, the most alarming aspect of Cambridge Analytica's "breach" is that it wasn't a breach at all. It happened almost entirely above board and in line with Facebook policy.

Aleksandr Kogan, a University of Cambridge professor, accessed the data of more than 50 million Facebook users simply by creating a survey filled out by 270,000 people. Facebook provided Kogan with the data of anyone who took the survey, as well as their friends' data. In a statement, Facebook said, "Kogan gained access to this information in a legitimate way and through the proper channels that governed all developers on Facebook at that time."

The one rule Kogan violated, according to Facebook, was passing the user data to third parties, including Cambridge Analytica, the political data firm founded by former Trump aide Steve Bannon and conservative donor Robert Mercer.

But even Facebook sources acknowledged to CNN that it is impossible to completely monitor what developers and advertisers do with the data once it's in their hands. It's like selling cigarettes to someone and telling them not to share the cigarettes with their friends.

The limits of Facebook's ability to enforce compliance with data usage was highlighted by Facebook's own response to Kogan's violation. Facebook says it learned of Kogan's violation in 2015 and was subsequently assured by all parties that the data had been destroyed. But Facebook also says it learned just days ago that "not all data was deleted."

In a statement, Facebook deputy general counsel Paul Grewal said "protecting people's information is at the heart of everything we do." That may be a hard argument for the public to accept given that Facebook's business is providing people's information to outside parties whose ultimate goals are unknowable.

Facebook says that starting in 2014 it gave users greater control over what parts of their information are shared with app developers and advertisers. It also says it has enhanced its app review process to require developers "to justify the data they're looking to collect and how they're going to use it — before they're allowed to even ask people for it."

Still, the sources inside Facebook acknowledge that such measures cannot guarantee that some people won't succeed in mining Facebook data and passing it off to third parties.

On Capitol Hill, the talk of regulation is growing louder. Lawmakers seeking tighter restrictions on big tech feel even more emboldened than they did in the wake of revelations about Russian meddling in the 2016 election, a source on Capitol Hill told CNN.

Democratic Senator Amy Klobuchar has called on Zuckerberg to appear before the Senate Judiciary Committee, on which she serves, to explain "what Facebook knew about misusing data from 50 million Americans in order to target political advertising and manipulate voters."

Meanwhile, Zuckerberg and the rest of the Facebook leadership seem conspicuously absent. Neither the Facebook CEO nor his top deputy, Sheryl Sandberg, have commented publicly on the matter. They have left that task to Grewal, a lawyer. No one has provided an adequate explanation for why Facebook did not disclose Kogan's violation to the more than 50 million users who were affected when the company first learned about it in 2015.

"We are conducting a comprehensive internal and external review and are working to determine the accuracy of the claims that the Facebook data in question still exists. That is where our focus lies as we remain committed to vigorously enforcing our policies to protect people's information," Grewal said in a statement Sunday.

All of this comes as Facebook is already getting questions about the long-term appeal of its platform, at least in the United States. The number of daily active users in the United States — a whopping 184 million — declined for the first time last quarter. Facebook also lost 2.8 million users under the age of 25 last year, and is set to lose another 2 million this year, according to eMarketer.

The Cambridge Analytica scandal is likely to hasten user disenchantment with the network, sources inside Facebook acknowledged. Facebook is increasingly being seen as a platform vulnerable to manipulation by political groups, foreign governments, or worse.

Ultimately, however, the real culprit in the eyes of the American public may not be Cambridge Analytica or the Russians, but rather Facebook itself.

Joescoundrel

03-27-2018, 09:53 AM

What you need to know about Facebook's data debacle

by Charles Riley @CRrileyCNN

March 20, 2018: 6:43 AM ET

What happens to the data you post on Facebook? And who's responsible for how those personal details are used?

Facebook (FB) is under intense pressure to answer these questions - and more - after it admitted that a company linked to President Donald Trump's campaign had accessed and improperly stored a huge trove of its user data.

The controversy erupted as UK media and The New York Times reported that data analysis firm Cambridge Analytica tried to influence how Americans voted using information gleaned from millions of Facebook profiles.

Here's what you need to know.

What happened?

Facebook said it gave permission to University of Cambridge psychology professor Aleksandr Kogan to harvest information from users who downloaded his app — "thisisyourdigitallife."

The app offered a personality test. But Facebook users who downloaded the app also gave the professor permission to collect data on their location, their friends and content they had "liked."

That was allowed under Facebook's rules at the time.

The New York Times, however, reported that Kogan provided that data - which included information from over 50 million profiles - to Cambridge Analytica, breaching Facebook's rules.

Cambridge Analytica was working to develop techniques that could be used to influence voters.

Facebook said it asked Cambridge Analytica to delete the data in 2015, but learned several days ago from "reports" that not all of it had been purged.

Cambridge Analytica said that the data set revealed by The New York Times was not used "as part of the services it provided to the Donald Trump 2016 presidential campaign."

The company's methods came under further scrutiny late Monday after a British television channel aired a report showing CEO Alexander Nix discussing potential bribery and entrapment of politicians.

In the report, Nix is seen suggesting the encounters could be filmed and posted to the internet.

Cambridge Analytica said in a statement that the undercover Channel 4 report was "edited and scripted to grossly misrepresent the nature of those conversations and how the company conducts its business."

Nix said the company does not engage in bribery or entrapment.

Why does this matter?

Facebook has been unable to shake off questions over its role in the 2016 presidential election.

CEO Mark Zuckerberg initially expressed skepticism that Facebook could have been used to influence voters, but a series of revelations over Russian meddling have caused the company to make big changes in recent months.

It has sought to crack down on fake news, undermine the business model used by trolls and make political advertising more transparent.

Zuckerberg now has a whole new set of questions to address: Was Facebook transparent enough with users about how their information would be used? Should it have done more to keep tabs on how third parties were using data?

There could be major implications for the company's business model, which is based on selling user data to app developers and advertisers.

Lawmakers and regulators have already seized on the controversy.

Massachusetts Attorney General Maura Healey said Saturday that her office is opening an investigation into Facebook and Cambridge Analytica. The UK Information Commissioner's Office is also investigating, as is the European Union parliament.

"This is a big deal. ... The privacy violations there are significant," Republican Senator Jeff Flake told CNN. "The question is, who knew it? When did they know it? How long did this go on?"

Facebook's stock has been pummeled amid the fiasco. The shares tumbled nearly 7% Monday, shaving about $37 billion off the value of the company.

What happens next?

Lawmakers have called on Zuckerberg to explain his company's actions.

Amy Klobuchar, a Democrat who serves on the Senate Judiciary Committee, said on Saturday that "Zuckerberg needs to testify."

"This is a major breach that must be investigated," she said on Twitter. "It's clear these platforms can't police themselves."

The UK's Information Commissioner's Office said Monday that it was trying to obtain a warrant to search the offices of Cambridge Analytica in London.

Facebook also said that Cambridge Analytica had agreed to a digital forensic audit of its servers and systems in an attempt to show that it deleted certain Facebook data it held on some American users.

Auditors hired by Facebook visited Cambridge Analytica's London office on Monday evening, but stood down at the request of the Information Commissioner's Office.

The revelations are likely to fuel calls for more regulation of tech companies. The industry is already scrambling to prepare for tough new data privacy rules in Europe, and similar measures could be considered elsewhere.

(CNN Money) — Google just lost a major copyright case that could cost it billions of dollars and change how tech companies approach software development.

An appeals court said on Tuesday that Google violated copyright laws when it used Oracle's open-source Java software to build the Android platform in 2009.

Tuesday's ruling is the latest development in a topsy-turvy eight-year battle between Google and Oracle.

Oracle first brought its case against Google in 2010, claiming that Android infringes two patents that Oracle holds on its Java software, a ubiquitous programming language powering everything from phones to websites.

In 2012, a jury determined that Java does not deserve protection under copyright law. Two years later, an appeals court overturned the ruling, raising the question of whether Google's use of Oracle's API violated copyright law.

Related: Facebook has lost $80 billion in market value

A jury determined in 2016 that Google's use of Oracle's APIs was legal under the copyright law's fair use doctrine, which allows the free use of copyrighted material under specific circumstances. Oracle appealed the decision, and a judge took its side on Tuesday.

"There is nothing fair about taking a copyrighted work verbatim and using it for the same purpose and function as the original in a competing platform," a panel of three Federal Circuit judges wrote in Tuesday's opinion.

Oracle said in a statement on Tuesday that the recent "decision protects creators and consumers." Google said it is weighing its next steps. It could appeal to the full slate of judges on the court.

"We are disappointed the court reversed the jury finding that Java is open and free for everyone," a Google spokesman said in a statement. "This type of ruling will make apps and online services more expensive for users. We are considering our options."

Related: Jury sides with Google in billion dollar Oracle suit

Another court will decide how much Google owes Oracle in damages.

As of 2016, Oracle was seeking about $9 billion from Google. But because APIs have become much more widespread over the years, a court could decide that Oracle deserves more, said Christopher Carani, a partner with McAndrews, Held & Malloy and a professor at Northwestern's law school.

"The numbers in this case will be staggering," he added.

The verdict is likely to eclipse the current largest copyright verdict of $1.3 billion, awarded to Oracle when it sued rival SAP in 2010.

Google isn't the only company that stands to lose from this decision. Many others rely on open-source software to develop their own platforms. Tuesday's ruling means that some will either have pay to license certain software or develop their own from scratch.

"The decision is going to create a significant shift in how software is developed worldwide," Carani said. "It really means that copyright in this context has teeth."

There’s a quiet cultural revolution going on in offices throughout the country involving the very way we think and has involved an audit, not of numbers, but of all kinds of procedures and technologies.

I thought long and hard about a short title for my column that would describe what this cultural revolution is all about and settled on that one word, “confidential,” which is the way we used to handle matters, mainly around correspondence. For large offices, you would write or stamp “Confidential” on a document and seal it well before passing it on. To some extent that’s still being done today, sometimes with almost ridiculous but ineffective zeal.

Look at the mail you’re getting at home and you’ll find many are still stapled in a way that you have to remove the staple wire first before opening the envelope or you risk ripping through the document inside, which might be a check, now mangled and could be rejected by the bank when you want to deposit it.

The other way documents were “secured” was to tape it end to end. Being on the receiving end of so many of these documents, I would tell my staff to call the sender and politely complain about how they have mummified the document, making it practically impossible to open.

Now comes a law that could either worsen, or rationalize, the way we handle confidential information. The full name of that law would take an entire paragraph so I will just use the short one, the Data Privacy Act of 2012. It took some years to get a bureaucracy going together with implementing rules and regulations, all to ensure the protection of personal information in all of the country’s offices.

Overseeing this gargantuan task is a National Privacy Commission, which has been pressing hard on institutions to establish data protection offices that will ensure that all sensitive personal information is secured, and not just by stamping “confidential” and stapling or mummifying documents.

Call centers and data

The law was actually forced upon us by the business process outsourcing (BPO) industry, which employed 1.3 million Filipinos last year and still counting. Most of them are in the contact subsector, better known as call centers and they have access to all kinds of sensitive information provided not just by Filipinos but residents of countries throughout the world. Remember the last time you wanted to clarify a credit card billing which you think was mistaken and how they asked you about everything from your mother’s maiden name to the last credit transaction you had.

Think of all the forms you’ve had to fill out over the years. To get some kind of insurance, for example, you may have been asked to submit to a full medical checkup where you were asked all kinds of questions about the causes of death in your family, and your own existing illnesses, surgical procedures … all the way up to your sex life: how many people have you had sex with, were they male or female, and what kind of sex did you have?

All that information is stored in computer databases.

Educational institutions have all kinds of sensitive data. I’m thinking of two offices in particular. There’s the health service’s medical records, and there’s the registrar, which still has the “jackets” — enrollment forms and, until recently, grades—of each and every person who has ever enrolled in UP, whether you finished or not. Diliman, being the main campus, has files that go back more than a century. I have a feeling many UP alumni would worry more about their grades, rather than their medical records, being kept private.

The new law spells out penalties, including imprisonment, for leaking out sensitive personal information. Hold your breath as I mention some of them: “race, ethnic origin, marital status, age, color and religion, philosophical or political affiliation,” “health, education, genetics or sexual life,” “offenses committed or alleged to have been committed,” “social security, current health records, licenses or its denials, tax returns.”

Each of those items could be further broken down when you think of what “sensitive” can mean. Under this law, we cannot provide the grades of a student to anyone, not even the parents, if the student has reached legal age (18 ) and unless signed consent is given.

Whistleblowers

The reason I said all this involves a cultural revolution is that the idea of data privacy is almost nonexistent in our culture. The norm is to share information. Have a crush on someone and want to send a gift on his or her birthday? No problem, everyone knows what office and who in that office can get you that information.

Birthdays seem relatively benign but think hard about it and you might be opening the doors to unwanted attention.

Salaries are another example, a source of a lot of resentment within an office, so in UP Diliman we are now banishing the days of open pay slips. Instead, the pay slips come in an encrypted envelope, like the ones banks give you when you get a new ATM card with a password.

Medical records are particularly sensitive. For years now, as dean and then as chancellor, I’ve had to sign all applications for reimbursement of medical expenses and I’ve always been uncomfortable at how the papers go through several offices and personnel, with all kinds of sensitive information. Culture comes into the picture with people, often with the best of intentions, telling friends, “Did you know Professor xxx has cancer? Maybe we can help raise funds for her.”

Golden rule

In other cases, malicious intentions may come in. It’s been so tiring having to respond to anonymous “sumbong” (whistleblowing) made to the government’s hotline, with distorted information that clearly came from access to official files in government agencies, questioning everything from bonuses to an out-of-town conference and often out of a desire for character assassination rather than a concern over corruption. The Filipino term “maiinit na mata” (hot eyes) is an appropriate description of the sources of data breaches.

“Data breach” is a term that will make it into our vocabularies as the Data Privacy Act is implemented and the breach is fairly easy given that so much information is now stored in computer databases. The Data Privacy Act requires that the databases are secured, requiring layers of passwords and security measures, but even the best of systems will still be heavily challenged by culture, to the point where we may have to require all staff—secretaries, receptionists, even drivers — to sign nondisclosure agreements, meaning they are bound by law not to give out sensitive information, not just from computers and documents but from meetings and even conversations.

But more than nondisclosure agreements, we will have to look for other ways to tackle cultural attitudes to privacy. It will mean, for example, reminding someone during a conversation that they just named someone and gave away sensitive information about that person. It will mean, too, periodic meetings discussing data privacy and breaches and the foundation of it all, the golden rule: Do not do unto others what you do not want done to you.

Joescoundrel

04-05-2018, 10:49 AM

Facebook says 87 million may be affected by data breach

Agence France-Presse / 07:58 AM April 05, 2018

Facebook said on Wednesday that the personal data of up to 87 million users was improperly shared with British political consultancy Cambridge Analytica, as Mark Zuckerberg defended his leadership at the huge social network.

Facebook’s estimate was far higher than news reports suggesting 50 million users may have been affected in the privacy scandal, which has roiled the company and sparked questions for the entire internet sector on data protection.

Zuckerberg told reporters on a conference call that he accepted responsibility for the failure to protect user data but maintained that he was still the best person to lead the network of two billion users.

“I think life is about learning from the mistakes and figuring out how to move forward,” he said in response to a question on his ability to lead the company.

“When you’re building something like Facebook, which is unprecedented in the world, there are things that you’re going to mess up… What I think people should hold us accountable for is if we are learning from our mistakes,” he also said.

Zuckerberg said 87 million was a high estimate of those affected by the breach, based on the maximum number of connections to users who downloaded an academic researcher’s quiz that scooped up personal profiles.

“I’m quite confident it will not be more than 87 million, it could well be less,” he said.

To remedy the problem, Zuckerberg said Facebook must “rethink our relationship with people across everything we do” and that it will take a number of years to regain user trust.

The new estimate came as Facebook unveiled clearer terms of service to enable users to better understand data sharing, and as a congressional panel said Zuckerberg would appear next week to address privacy issues.

Facebook has been scrambling for weeks in the face of the disclosures on hijacking of private data by the consulting group working for Donald Trump’s 2016 campaign.

The British firm responded to the Facebook announcement by repeating its claim that it did not use data from the social network in the 2016 election.

“Cambridge Analytica did not use GSR (Global Science Research) Facebook data or any derivatives of this data in the US presidential election,” the company said in a tweet. “Cambridge Analytica licensed data from GSR for 30 million individuals, not 87 million.”

Zuckerberg on the Hill

Meanwhile, Facebook’s chief technology officer Mike Schroepfer said new privacy tools for users of the huge social network would be in place by next Monday.

“People will also be able to remove apps that they no longer want. As part of this process, we will also tell people if their information may have been improperly shared with Cambridge Analytica,” he said in a statement.

Schroepfer’s post was the first to cite the figure of 87 million while noting that most of those affected were in the United States (US).

Facebook also said its new terms of service would provide clearer information on how data is collected and shared without giving the social network additional rights.

Earlier Wednesday, the House of Representatives’ Energy and Commerce Committee announced what appeared to be the first congressional appearance by Zuckerberg since the scandal broke.

The April 11 hearing will “be an important opportunity to shed light on critical consumer data privacy issues and help all Americans better understand what happens to their personal information online,” said the committee’s Republican chairman Greg Walden and ranking Democrat Frank Pallone in a statement.

The Facebook co-founder is also invited to other hearings amid a broad probe on both sides of the Atlantic.

Deleting Russian ‘trolls’

Zuckerberg further told reporters in the conference call that he was committed to ensuring that Facebook and its partners do a better job of protecting user data, and that it must take a more serious approach after years of being “idealistic” about how the platform is used.

“We didn’t take a broad enough view on what our responsibility is, and that was a huge mistake. It was my mistake,” Zuckerberg admitted.

He said that while “there are billions of people who love the service,” there is also a potential for abuse and manipulation.

“It’s not enough just to give people a voice,” he also said. “We have to make sure people don’t use that voice to hurt people or spread disinformation.”

Late Tuesday, Facebook said it deleted dozens of accounts linked to a Russian-sponsored Internet unit, which has been accused of spreading propaganda and other divisive content in the US and elsewhere.

The social networking giant said it revoked the accounts of 70 Facebook and 65 Instagram accounts, and removed 138 Facebook pages controlled by the Russia-based Internet Research Agency (IRA).

The agency has been called a “troll farm” due to its deceptive post aimed at sowing discord and propagating misinformation.

The unit “has repeatedly used complex networks of inauthentic accounts to deceive and manipulate people who use Facebook, including before, during and after the 2016 US presidential elections,” said a statement of Facebook chief security officer Alex Stamos.

Joescoundrel

04-13-2018, 08:32 AM

Zuckerberg flubs details of Facebook privacy commitments

Associated Press / 06:34 AM April 13, 2018

MENLO PARK, Calif. - Over two days of questioning in Congress, Facebook CEO Mark Zuckerberg chief revealed that he didn’t know key details of a 2011 consent decree with the Federal Trade Commission that requires Facebook to protect user privacy.

With congressional hearings over and no immediate momentum behind calls for regulation, the biggest hammer still hanging over Facebook in the U.S. is a fresh FTC investigation. The probe follows revelations that pro-Trump data-mining firm Cambridge Analytica acquired data from the profiles of millions of Facebook users. Facebook also faces inquiries in Europe.

The 2011 agreement bound Facebook to a 20-year privacy commitment, and any violations of that pact could cost Facebook a ton of money, even by its flush-with-cash standards. If Zuckerberg’s testimony before Congress is any indication, the company might have something to worry about.

Zuckerberg repeatedly assured lawmakers Tuesday and Wednesday that he believed Facebook is in compliance with that 2011 agreement. But he also flubbed simple factual questions about the consent decree.

“Congresswoman, I don’t remember if we had a financial penalty,” Zuckerberg said under questioning by Colorado Rep. Diana DeGette on Wednesday.

“You’re the CEO of the company, you entered into a consent decree and you don’t remember if you had a financial penalty?” she asked. She then pointed out that the FTC doesn’t have the authority to issue fines for first-time violations.

In response to questioning by Rep. Mike Doyle of Pennsylvania, Zuckerberg acknowledged: “I’m not familiar with all of the things the FTC said.”

Zuckerberg also faced several questions from lawmakers about how long it takes for Facebook to delete user data from its systems. He didn’t know.

The 2011 consent decree capped years of Facebook privacy mishaps, many of which revolved around its early attempts to follow users and their friends around the web. Any violations of the 2011 agreement could subject Facebook to fines of $41,484 per violation per user per day. To put that in context, Facebook could theoretically owe $8 billion for one single day of a violation affecting all of its American users.

The current FTC investigation will look at whether Facebook engaged in “unfair acts” that cause “substantial injury” to consumers.

David Vladeck, a Georgetown University law professor who headed the FTC’s bureau of consumer protection when Facebook signed the deal, said in a blog post this month that Facebook’s argument that it didn’t violate the deal are “far-fetched.” Two days of testimony didn’t change his mind.

“Most of the reforms Facebook has talked about in the past couple of weeks proposed safeguards that should have been in place years ago,” he said by email on Wednesday following 10 hours of Zuckerberg’s testimony.

At issue are at least three sections of the decree.

The first requires that users give “affirmative express consent” any time that data they haven’t made public is shared with a third party. Facebook also has to tell users what data will be shared, who the third parties are, and explicitly note that the sharing exceeds their privacy-setting restrictions.

“In my view, these requirements were not met,” Vladeck said. Sen. Catherine Cortez Masto of Nevada made a similar point Tuesday, arguing that user consent couldn’t have been buried in their privacy settings.

“It had to be something very specific. Something very simple,” she said. “And that did not occur. Had that occurred, we wouldn’t be here today talking about Cambridge Analytica.”

A second portion of the decree forbids Facebook to share user-deleted data with third parties after 30 days, assuming the information was stored on servers under Facebook’s control.

The third and broadest part binds Facebook to a “comprehensive privacy program” vetted by an outside auditor. The question raised there is whether Facebook acted reasonably and quickly when it found out there may have been breaches of the deal, according to law professor William Kovacic of George Washington University, who served as an FTC commissioner when Facebook was being investigated but left before the settlement was announced.

Facebook has argued that it only shared data that was made public by users, or permitted by their privacy settings. Zuckerberg said Wednesday that audits it committed to never turned up problems.

“Was it deliberate? Was it inadvertent? Was there a dramatic lack of care?” Kovacic said. “Everything depends on how they go through this painstaking process of looking at what Facebook promised and what it actually did.”

The largest fine the FTC has ever imposed in a privacy case was a $22.5 million award in a settlement with Google in 2012. Kovacic said the investigation could take several months. If a case is brought, it would be prosecuted by the Justice Department.

Facebook is our gateway to friends, family, and loved ones. In the age of Duterte, it’s also a swamp, a cesspool of lies, and mean-spiritedness, a weapon used to justify mass slaughter and corruption.

It’s tempting at times to shut it down.

As Facebook founder Mark Zuckerberg gets ready for a grilling before the U.S. Congress on how the social network has morphed into a scary, treacherous platform, there is even a call to Facebook users to simply delete their accounts.

But no, I’m not going to do that.

For Filipinos, there are ways to make the most of Facebook without being mired in and overwhelmed by the nastiness. There are ways to use Facebook to understand, survive, and even find ways to join the fight against Duterte’s fascism.

The first step for me was to answer two questions:

What do I really want to get out of Facebook?

And what role must Facebook never play in my life?

The answer to the Question No. 1 is simple: I use Facebook to stay connected and celebrate life with friends and family.

The answer to Question No. 2 increasingly is becoming clear: Facebook IS NOT, SHOULD NOT, SHOULD NEVER BE my a primary source of news and information about what’s going on in the world.

Let’s face it: As a source of news and insights, Facebook can be unreliable, chaotic, and dangerous.

And I’m not just referring to Duterte’s now infamous army of trolls and supporters. We now come across so many lies and half-truths on newsfeeds that I’ve become extremely careful about what I read.

For example, when I first saw posts blasting Duterte for ordering soldiers to shoot women guerrillas in the vagina, my initial reaction was: “Oh common, he can’t be that stupid.”

It just seemed like such an extreme, over-the-top thing to say, that I didn’t believe he’d say it. Of course, it turned out to be true. But only after checking with several news sources, including international publications, did that become clear.

But that’s how I typically react now to many posts or reports that pop up on my Facebook feed. I take my time before believing a shocking or outrageous claim, and that includes posts that fit into how I see the world.

I also know not all of the roughly 2,000 people in my network share my views. I know many of them disagree with me, and quite a few probably hate my guts because of what I’ve written about Dutertismo.

Many of them became part of my network because we knew each other casually many years ago or because they grew familiar with my writing and friended me. I can’t say that we really know each other well, but over the past two years, it’s become clear that they fall into two main camps, which is how I’ve organized them on Facebook: those who are against Duterte, and those who support him.

In a recent article on Why Most Writers Denounce Duterte, the poet and novelist Krip Yuson mentioned his decision not to unfriend Facebook “friends” who support Duterte: “Unlike some emotional FB users, I haven’t dropped Friends on my list who happen to be on the other side. This way, I still get to read their posts, thus allowing for a reckoning of the generally poor thinking that dictates their choice of idols, their biases and prejudices, and the often irrational way they are caught up on the piteous side of national folly (a stronger word than foolishness).”

I agree. The posts of pro-Duterte people in my network may be cringe-worthy, but they can serve a purpose: they offer insights into the rise of Dutertismo.

We just have to know how to manage the information flow.

I did this by essentially using the social media platform the way I use television. I created “channels,” or “friends lists” as they are called on FB, to organize people in my network and the way I access the seemingly endless stream of information.

This has given me a deeper sense of the political divisions which are complex.

The pro-Duterte people have many reasons for supporting him. Many of them grew tired of the elitist, bureaucratic, ineffective, and corrupt politics represented by the Aquinos and thought a tough-talking mayor from Davao would be the answer.

But within their ranks are the extremists. These are the people who have embraced and endorsed the most despicable positions of the Duterte regime.

They essentially parrot, endorse and/or defend the worst, vilest pronouncements of Duterte and his government.

They think his jokes about rape and shooting women in the vagina are funny.

They reject reports of mass killings under this government or even defend the slaughter as a necessary step: “E mga kriminal naman lahat iyan e. They’re all criminals anyway.”

They dismiss calls for due process as irrelevant and echo Duterte’s view that human rights are unimportant.

Then there are the anti-Duterte people. Like me, they are vehemently opposed to the killings, are appalled by Duterte’s language, and have grown disgusted with the growing cases of corruption and brutality.

But even in this camp, there are extremists.

They take their disgust for Duterte to an irrational level. Many of them are rabidly pro-Aquino and anti-progressive.

Some appear to take the cues from the mean-spiritedness of the Duterte supporters. They use slut-shaming language to describe Duterte’s women supporters, such as Mocha Uson. They post or share repugnant memes that poke fun at Duterte’s looks or those of his closest allies.

I spend less than a half hour each week on these channels. Sometimes even less. And I do so mainly to get a quick sense of what’s being discussed and how they are being discussed. Occasionally, I come across content that are worth checking out in depth: a news report, a feature article, a new book, a new academic study, a new documentary.

But here’s an important point: Facebook may be a good source for leads. But it’s foolish and dangerous to use it as THE main source of news and information.

The total time I spend browsing on Facebook has been dramatically cut over the past couple of years. And 99% of that time I spend on a channel devoted to family and friends. Yes, we sometimes engage in political discussions, even disputes. But most of the exchanges are personal, respectful. And always fun.

This is where we talk about our kids, our work, our families.

This is where we exchange tips on parenting, travel, and household chores.

This is where we celebrate births and graduations. This is where we express sympathy to friends who’ve lost a loved one.

And, most important of all, this is where we laugh, where we swap jokes, where we share funny memories, and even, playfully tease one another.

And this is where my friends and I keep alive and celebrate that cherished Filipino tradition with the occasional post: “Pareng Joey, Pareng Jojo, Pareng Ed, Pareng Rene, kelan sunod na inuman? (When’s the next drinking session?)”

Joescoundrel

04-23-2018, 09:06 AM

What Bitcoin Is Really Worth May No Longer Be Such a Mystery

It’s somewhere between $20 and $800,000, according to economic theory and a night of drinking.

April 19, 2018, 5:01 PM GMT+8

It took two economists one three-course meal and two bottles of wine to calculate the fair value of one Bitcoin: $200.

It took an extra day for them to realize they were one decimal place out: $20, they decided, was the right price for a virtual currency that was worth $1,200 a year ago, flirted with $20,000 in December, and is still around $8,000. Setting aside the fortunes lost on it this year, Bitcoin, by their calculation, is still overvalued, to the tune of about 40,000 percent. The pair named this the Côtes du Rhône theory, after the wine they were drinking.

“It’s how we get our best ideas. It’s the lubricant,” says Savvas Savouri, a partner at a London hedge fund who shared drinking and thinking duties that night with Richard Jackman, professor emeritus at the London School of Economics. Their quest is one shared by the legions of traders, techies, online scribblers, and gamblers and grifters mesmerized by Bitcoin. What’s the value of a cryptocurrency made of code with no country enforcing it, no central bank controlling it, and few places to spend it? Is it $2, $20,000, or $2 million? Can one try to grasp at rational analysis, or is this just the madness of crowds?

Answering this question isn’t easy: Buying Bitcoin won’t net you any cash flows, or any ownership of the blockchain technology underpinning it, or really anything much at all beyond the ability to spend or save it. Maybe that’s why Warren Buffett once said the idea that Bitcoin had “huge intrinsic value” was a “joke”—there’s no earnings potential that can be used to estimate its value. But with $2 billion pumped into cryptocurrency hedge funds last year, there’s a lot of money betting the punchline is something other than zero. If Bitcoin is a currency, and currencies have value, surely some kind of stab—even in the dark—should be made at gauging its worth.

Writing on a tablecloth, Jackman and Savouri turned to the quantity theory of money. Formalized by Irving Fisher in 1911, with origins that go back to Copernicus’s work on the effects of debasing coinage, the theory holds that the price of money is linked to its supply and how often it’s used.

Here’s how it works. By knowing a money’s total supply, its velocity - the rate at which people use each coin - and the amount of goods and services on which it’s spent, you should be able to calculate price. Estimating Bitcoin’s supply at about 15 million coins (it’s currently a bit more), and assuming each one is used an average of about four times a year, led Jackman and Savouri to calculate that 60 million Bitcoin payments were supporting their assumed $1.2 billion worth of total U.S. dollar-denominated purchases. Using the theory popularized by Fisher and his followers, you can - simplifying things somewhat - divide the $1.2 billion by the 60 million Bitcoin payments to get the price of Bitcoin in dollars. That’s $20.

So far, so straightforward. It turns out, however, that when it comes to putting a price on Bitcoin, the same equation can yield many different answers. In September, Dan Davies, an analyst at financial research firm Frontline Analysts Ltd., wrote up a “guesstimate” of Bitcoin’s value that he’d originally conducted in 2014 using—again—the quantity theory of money. He plugged in estimates for each variable and got about $600.

On Dec. 10, Mark Kirker, a high school math teacher in California, published an analysis online using the same equation for the same purpose. He concluded that Bitcoin should be way above then-current levels. He’s since revised the number. Contacted by Bloomberg, he says it could be $15,000.

How can something be worth $20, $600, and $15,000 within the same theory? One key reason stems from what we don’t know about cryptocurrencies rather than what we do know. We know Bitcoin’s maximum supply is 21 million, and we know the velocity of most commonly used currencies. We don’t know how widely Bitcoin will be adopted tomorrow, how frequently it will transact, or what it will be used for. In Davies’s example, a guide to Bitcoin’s future potential was the illicit drugs market, an obvious home for more-or-less-untraceable digital cash. The United Nations has estimated this market at $120 billion. Plugging in that number helped Davies get to $600.

For Kirker, though, drugs and criminals are only part of the story. He imagines including the output of some developing countries where cryptocurrencies might have better takeup than traditional banking. But with so much up in the air, the equation starts to look less like algebra and more like alchemy. Even in the non-Bitcoin world, the velocity of money and its price can fluctuate in ways not predicted by fundamental analysis. “I am not wholly surprised it doesn’t pin down a price target to within a factor of 100 either way,” Davies says.

Some believe the cloud of confusion has to do with the simple fact that cryptocurrency is something entirely new—it needs a fresh school of economic thinking to go with it. A quantity theory of cryptomoney, perhaps.

John Pfeffer, formerly a partner at KKR & Co., has written several papers to this effect, arguing that technology is turning the centuries-old equation on its head. Bandwidth and computing resources are the fuel of cryptocurrencies, and they need their place in quantity theory, he argues. His version of the equation imagines a world in which more powerful computers and faster connection speeds combine to lower the cost of maintaining a crypto-economy over time, while the same forces radically increase the availability and speed of its digital coins. There already exist hundreds of tokens other than Bitcoin, pointing to a world where digital currencies are, well, a dime a dozen.

In a future where cryptocurrencies become a form of economic resource (like fuel, water, or electricity) that’s computerized and commoditized, would anyone get rich from hoarding them in her trading account? No, says Pfeffer. In his view, the more widely used a particular brand of digital cash becomes, the higher the probability its value tends toward zero. In quantity theory terms, cryptocoins’ velocity could go way, way up, while the cost of many services within the crypto-economy could go way, way down. Crypto could change the world and still leave a lot of people with worthless tokens.

Pfeffer dangles one hope in front of the Bitcoin faithful who dream of riches: the possibility there’s one cryptocurrency out there that will serve as a store of value for the digital world. Like gold, a metal seen by investors as a haven in times of crisis or when the purchasing power of cash is eroding, whichever coin wins that crown will have a completely different use—and price—than the rest. Applying this thinking to Bitcoin, Pfeffer explains, would yield a price target of $260,000 to $800,000.

Such a value would be not too far off $1 million—where the frequently mocked, frizzy-haired self-help guru James Altucher expects Bitcoin to be in 2020. Software entrepreneur John McAfee has said it will hit $500,000. “If not, I will eat my d--- on national television,” he tweeted. He later doubled his target price. Pfeffer has been more careful than most in warning of significant risk of investment loss. “This could all go substantially to zero for various reasons,” he wrote in December.

Putting a price on Bitcoin is therefore less about crunching numbers and more about deciding just what it is and what it could be, if anything. That’s appetizing for risk-hungry optimists in the venture capital world, who are accustomed to their investments turning into big hits or big flops. Ride-hailing service Uber Technologies Inc., for example, has lost an eye-watering amount of money, yet it’s one of the most highly valued companies in the world. It’s a bet that more traditional investors would have difficulty justifying using traditional metrics.

But it also means science and snake oil sit side by side. Quantity theory is one example of how an equation can be remodeled to fit different scenarios or different wishes about where the price will land. And it’s not the only one: Network adoption, the cost curve of Bitcoin mining, and transaction volumes have all been bundled into marketable literature advising traders and investors on what to buy. It’s a thick numbers soup. At least Uber has financial accounts to review.

Those with long memories also remember the quantitative analyses that underpinned the hot new asset classes of the past, from dot-com stocks to securitized art. These were often sold to investors as new metrics and radical investment theses, only to be ditched when a recession or panicked sell-off hit. “They’re always talking about a new paradigm, but I say it’s the same meat, different gravy,” says Côtes du Rhône theorist Savouri, who maintains traditional economic theory should be embraced rather than ignored by the Bitcoin faithful.

For Savouri, the easiest way to understand the efflorescence of theories and valuations being bandied about is to opt for a simple, overarching one: the greater fool theory. It says that one fool buys in the hope that there’s an ever-bigger sucker willing to pay more. “The problem,” he says, “is that we don’t breed fools geometrically.”

Lionel Laurent is a reporter for Bloomberg Gadfly.

Joescoundrel

04-25-2018, 09:38 AM

For the first time, Facebook spells out what it forbids

Associated Press / 07:30 PM April 24, 2018

NEW YORK - If you’ve ever wondered exactly what sorts of things Facebook would like you not to do on its service, you’re in luck. For the first time, the social network is publishing detailed guidelines to what does and doesn’t belong on its service – 27 pages worth of them, in fact.

So please don’t make credible violent threats or revel in sexual violence; promote terrorism or the poaching of endangered species; attempt to buy marijuana, sell firearms, or list prescription drug prices for sale; post instructions for self-injury; depict minors in a sexual context; or commit multiple homicides at different times or locations.

Facebook already banned most of these actions on its previous “community standards” page, which sketched out the company’s standards in broad strokes. But on Tuesday it will spell out the sometimes gory details.

The updated community standards will mirror the rules its 7,600 moderators use to review questionable posts, then decide if they should be pulled off Facebook. And sometimes whether to call in the authorities.

The standards themselves aren’t changing, but the details reveal some interesting tidbits. Photos of breasts are OK in some cases – such as breastfeeding or in a painting – but not in others.

The document details what counts as sexual exploitation of adults or minors, but leaves room to ban more forms of abuse, should it arise.

Since Facebook doesn’t allow serial murders on its service, its new standards even define the term. Anyone who has committed two or more murders over “multiple incidents or locations” qualifies.

But you’re not banned if you’ve only committed a single homicide. It could have been self-defense, after all.

Reading through the guidelines gives you an idea of how difficult the jobs of Facebook moderators must be. These are people who have to read and watch objectionable material of every stripe and then make hard calls – deciding, for instance, if a video promotes eating disorders or merely seeks to help people. Or what crosses the line from joke to harassment, from theoretical musing to direct threats, and so on.

Moderators work in 40 languages. Facebook’s goal is to respond to reports of questionable content within 24 hours. But the company says it doesn’t impose quotas or time limits on the reviewers.

The company has made some high-profile mistakes over the years. For instance, human rights groups say Facebook has mounted an inadequate response to hate speech and the incitement of violence against Muslim minorities in Myanmar.

In 2016, Facebook backtracked after removing an iconic 1972 Associated Press photo featuring a screaming, naked girl running from a napalm attack in Vietnam. The company initially insisted it couldn’t create an exception for that particular photograph of a nude child, but soon reversed itself, saying the photo had “global importance.”

Monica Bickert, Facebook’s head of product policy and counterterrorism, said the detailed public guidelines have been a long time in the works.

“I have been at this job five years and I wanted to do this that whole time,” she said.

The policy is an evolving document, and Bickert said updates go out to the content reviewers every week. Facebook hopes it will give people clarity if posts or videos they report aren’t taken down. Bickert said one challenge is having the same document guide vastly different “community standards” around the world.

What passes as acceptable nudity in Norway may not pass in Uganda or the US.

There are more universal gray areas, too.

For instance, what exactly counts as political protest? How can you know that the person in a photo agreed to have it posted on Facebook?

That latter question is the main reason for Facebook’s nudity ban, Bickert said, since it’s “hard to determine consent and age.” Even if the person agreed to be taped or photographed, for example, they may not have agreed to have their naked image posted on social media.

Facebook uses a combination of the human reviewers and artificial intelligence to weed out content that violates its policies. But its AI tools aren’t close to the point where they could pinpoint subtle differences in context and history – not to mention shadings such as humor and satire – that would let them make judgments as accurate as those of humans.

And of course, humans make plenty of mistakes themselves.

Sam Miguel

08-07-2018, 07:21 AM

The Companies Cleaning the Deepest, Darkest Parts of Social Media

We spoke to the documentary-makers behind 'The Cleaners,' the film about the people who take down content after you report it.

This article originally appeared on VICE UK.

Every minute of every single day, 500 hours of video footage is uploaded to YouTube, 450,000 tweets are tweeted, and a staggering 2.5 million posts are posted to Facebook. We are drowning in content, and within all of that content, there's undoubtedly going to be a chunk deemed as offensive—stuff that's violent, racist, misogynistic, and so on—which gets reported.

But what happens once you've reported that content? Who takes care of the next steps?

Directors Moritz Riesewieck and Hans Block have made a documentary exploring exactly that question, and the answer is much more depressing that you might have imagined. The Cleaners got its UK Premiere at Sheffield Doc/Fest in June, so I caught up with the pair shortly after to discuss how social media organizations are cleaning up the internet at the cost of others' lives.

VICE: Tell me about what drew you to this subject and why you wanted to make a film on it.

Hans Block: In 2013, a child abuse video went on Facebook and we asked ourselves how this happened because that material is obviously out there in the world but not usually on social media sites. So we began to ask if people were filtering the web or curating what we see. We found out that there were thousands of humans doing the job every day in front of a screen, reviewing what we're supposed to see or not see. We learned that a lot of the work is outsourced to the developing world, and one of the main spots is Manila in the Philippines, and almost nobody knows about it.

We found out very quickly when trying to contact the workers that it's a very secretive industry, and the company tried to stop the workers from speaking out. The companies use a lot of private policies and screen the accounts of the workers to make sure that nobody is talking with outsiders. They even use code words. Whenever a worker is working for Facebook, they have to say they are working for the "honey badger project." There's a real atmosphere of fear and pressure because there are reprisals for the workers; they have to pay a €10,000 [$11,672] fee if they talk about what they're doing. It's written into their nondisclosure agreements. They even fear they will be put in jail.

But you managed to track down some workers and ex-workers, and gained their trust for the film. Are these guys moderating all content or just stuff that gets reported?

Moritz Riesewieck: There are two ways the content is forwarded to the Philippines. The first is a pre-filter, an algorithm, a machine that can analyze the shape of, say, a sexual organ, or the color of blood or certain skin color. So whenever the pre-filter is analyzing and it picks up on something that is inappropriate, the machine will send that content to the Philippines and the content moderators will double check if the machine was right. The second route is when the user flags the content as being inappropriate.

So this pre-filter algorithm is effectively capable of racial profiling people under the justification of what? Trying to detect terrorists or gangs?

Hans: We've been trying to work out exactly how this machine is working, and this is one of the big secrets the companies have. We don't know what the machine is trained for in terms of detecting content. There are obvious things like a gun or a naked sexual organ, but some of the moderators told us that skin color is being detected to pick up on things like terrorism, yes.

What happens when something is deleted? Is it just removed from the user who uploaded it or is it removed universally?

It is taken down universally. Although, in one case, it's different: child pornography. Whenever a content moderator is reviewing child pornography, they have to escalate this and then report the IP address, the location, and name of user—all the info they have, basically. This gets sent to a private organization in the states and they then analyze all the info and forward it onto the police.

Are the content moderators adequately trained? Both in understanding the context of what they are reviewing and also in terms of the significance that some of their decisions can have?

Moritz: I would say this is this biggest scandal about the topic because the workers are very young; they are 18 or 19 and have just left school. [The companies] are recruiting people from the street for these roles. They only request a very low profile of skills, which is basically being able to operate a computer. They are then given three to five days of training, and within that, they have to learn all the guidelines coming from Facebook, Google, YouTube, etc. There are hundreds of examples they have to learn. For example, they have to memorize 37 terror organizations—all their flags, the uniform, the sayings—all in three to five days. They then have to give the guidelines back to the company because they are afraid someone will leak them.

Another horrible fact is that the workers only have a few seconds to decide. To fulfill the quota of 25,000 images a day, that means they have three to five seconds on each. You're not able to analyze the text of an image or thoroughly make sure you're making the right decision when you have to review so much content. When you click, you then have another ten options to click based on the reason for deletion—nudity, terrorism, self-harm, etc. They then use the labeling of the content moderators to train the algorithm. Facebook is working very hard to train AI to do the job in the future.

So the workers are providing the training to an algorithm that will eventually take their own job?

Hans: It won't be possible for AI to do that kind of job because they can analyze what is in the picture, but what is necessary is reading the context, to interpret what you are seeing. If you see someone fighting, it could be a scene from a play or a film. This sort of thing is something a machine will never be capable of.

Are the workers trained for the severity and trauma of what they are going to see—death, abuse, child pornography, etc?

Moritz: They are not trained for that. There is one moderator in the film who, only on her first day, after training and signing the contract, properly realized what she was doing there. She ended up reviewing child pornography on her first day and said to the team leader she was unable to do this, and the response was, "You've signed the contract. It's your job to do that." There's no psychological preparation for them to do their work. They have a quarterly session where the whole team is brought into one room and a psychologist asks, "Does anyone have a problem?" Of course, everyone is looking at the ground and afraid to talk about their problems because they are afraid to lose their job. It's for a good reason that Facebook is outsourcing work to the Philippines because there's such a big social pressure attached: The salary is not just their own—it's often for their whole family, of up to eight to ten people. It's not easy to leave the job.

Sam Miguel

08-07-2018, 07:23 AM

^^^ (Continued)

What's the scale of the operation out there?

We can't know the exact amount, but we think that, for Facebook alone, it's around 10,000 people. If you then add in all the other companies that are outsourcing this work to the Philippines, it's around 100,000. It's a big, big industry.

Bias is something that is explored interestingly in the film. You have a content moderator who describes herself as a "sin preventer" and is very religious, while another person is very pro-President Rodrigo Duterte and his violent anti-crime and drugs stance. Are they imparting their personal views, politics, and ethics onto something that should be objective?

Hans: Whenever Facebook is asked a question about the guidelines, they try to promote that the guidelines are objective and that they can be executed by everyone. That's not true, and that's what the film is about. It's very important what kind of cultural background you have. There are so many areas in the guidelines that require you to interpret and use your gut feeling to decide about what you see.

Religion is a big part of the Philippines; Catholicism is very strong. The idea of sacrifice is crucial in their culture. The idea is that sacrificing yourself to get rid of the sins of the world will make it a better place. So, for a lot of the workers, it is viewed as a religious mission. They use religion to give the job meaning, and that helps them do it a bit longer, as when you're traumatized through work you need to find meaning. On a political level, Duterte is very strong there and people believe in what he is doing. Almost all the content moderators we spoke to were really proud he won the election. Some of the people see this work as an extension of his work, so they will just delete what they don't like in line with the country's political views.

All eyes are on Facebook at the moment post-Cambridge Analytica. How do you think things are going to pan out in the area of content moderation?

Moritz: Zuckerberg, whenever he is asked in a testimony, says he will hire another 20,000 people across the network on content safety. But this is not the solution. It's not about the number of workers—you can hire another 20,000 low-wage Filipino workers doing the job and it won't fix any problem with online censorship. What he needs to do is to hire really well-trained journalists. Facebook is not just a place to share vacation pictures or invite someone to your birthday anymore; it's the most major communication infrastructure in the world. More and more people are using Facebook to inform themselves, so it's very important who is deciding what is published. Think about if someone else decided what was published on the Guardian's front page tomorrow—that would be a disaster and it would be a scandal, but this is the status quo of the social media companies right now. This has to change, but this costs money, and the only goal of the company is to gain more money... that's why they hire low-wage workers in the Philippines.

Some of the moderation requests, such as terrorism, are even coming directly from the US government, right?

Absolutely. The list of terrorist organizations that have to be banned on Facebook comes from Homeland Security, but obviously, in different parts of the world, we have very different ideas of who is a terrorist and who is a freedom fighter. This is a lie that Facebook has always stated; that they are a neutral platform, and that they are just a technical tool for the user. It's not true; they are taking editorial decisions every day.

How did you find the people who had left this job were getting on? Are they forced into a silence or tracked or anything?

Hans: When we were researching, there was one moment when the [content moderation] company was taking photos of us and they were then distributed to everyone in the company—even the former workers—with a warning that talking to us will lead to them being in trouble. There's a really big atmosphere of fear that the company is spreading. One employee contacted us via Facebook, and he was really angry with us and telling us to leave the city, or something will happen to us. So even the former workers are still scared of speaking after leaving. We had lawyers on our team to protect them, however; we knew what was written into their contracts and what we could say in our film.

One of the greatest tragedies captured in the film is that it tells the story of a worker who died by suicide. As far as you're aware, was that an anomaly or is that happening on a larger scale and not being reported?

Moritz: It is a wider thing happening in the company. The suicide rate is very high. Whenever we spoke with content moderators, almost everyone knows about a case where someone committed suicide because of the work. It's a problem in the industry. That's why it was important to include that in our film. They need to hire proper psychologists to protect them. The man in question who took his own life worked in reviewing self-harm content and had asked to be removed from doing that several times.

Are these social media companies aware that people are killing themselves over this work, do you think?

Hans: Good question. Yes, I think they do know because we made the film, but this is also a problem with outsourcing; it's so easy for Facebook to say, "We don't know about that because it's not our company and we are not responsible because we don't hire them and we're not responsible for the working conditions." This is the price we, and Facebook, are paying for cleaning social media—people killing themselves. We have to pressure these companies as loudly as we can.